Question: Two State Option Pricing Model T-bills currently yield 3.4 percent. Stock in Danatos Manufacturing is currently selling for $74 per share. There is no possibility

Two State Option Pricing Model T-bills currently yield 3.4 percent. Stock in Danatos Manufacturing is currently selling for $74 per share. There is no possibility that the stock will be worth less than$71 per share in one year. a) What is the value of a call option with a $70 exercise price? What is the intrinsic value? (b. What is the value of the call option with a $60 exercise price? What is the intrinsic value? (c. What is the value of the put option with a $70 exercise price? What is the intrinsic value?

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