The price of Profile, Inc., stock will be either $68 or $90 at the end of the
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Question:
The price of Profile, Inc., stock will be either $68 or $90 at the end of the year. Call options are available with one year to expiration. T-bills currently yield 6 percent. |
a. | Suppose the current price of the stock is $79. What is the value of the call option if the exercise price is $64 per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
b. | Suppose the current price of the stock is $79. What is the value of the call option if the exercise price is $74 per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
Related Book For
Corporate Finance
ISBN: 978-0071339575
7th Canadian Edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Gordon Ro
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