In: Finance
The price of Swearengen, Inc., stock will be either $70 or $92 at the end of the year. Call options are available with one year to expiration. T-bills currently yield 5 percent. |
a. |
Suppose the current price of the company's stock is $81. What is the value of the call option if the exercise price is $66 per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
Call value | $ |
b. |
Suppose the current price of the company's stock is $81. What is the value of the call option if the exercise price is $76 per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
Call value | $ |