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In: Finance

T-bills currently yield 4.5 percent. Stock in Danotos Manufacturing is currently selling for $82 per share....

T-bills currently yield 4.5 percent. Stock in Danotos Manufacturing is currently selling for $82 per share. There is no possibility that the stock will be worth less than $75 per share in one year.

a-1.

What is the value of a call option with a $69 exercise price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

a-2. What is the intrinsic value? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
b-1. What is the value of a call option with a $55 exercise price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
b-2. What is the intrinsic value? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
c-1. What is the value of a put option with a $69 exercise price? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
c-2. What is the intrinsic value? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

a-1.Call option value

a-2.Intrinsic value

b-1.Call option value

b-2.Intrinsic value

c-1.Put option value

c-2.Intrinsic value

Solutions

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