It is said that risk management does not necessarily add value, nevertheless, there exist explanations that support the implementation of risk management. Influenced by this thought the management of Risk Ltd$.$ is considering its options contracts, described below.

Contract $1$

A call option on a stock is traded at $$14.$ The market price of the underlying stock is $$60,$ and

the exercise price of the option is $$50.$

Contract $2$

One of Risk Ltd$.\text{'}$s options has an exercise price of $$30.$ The option's exercise value is $$44,$

and the option's premium is $$10.$

a$.$Determine the call option's exercise value for Contract $1.$

b$.$ Calculate the option's premium for Contract $1.$

What is the market value of the option for Contract $2?$

c$.$ Compute the price of the underlying stock for Contract $2.$

d$.$ Explain two $(2)$ ways in which risk management contributes to the increase in the value of

the company.