Transcribed Image Text
The price of Build A Fire Corp. stock will be either $61 or $86at the end of the year. Call options are available with one year toexpiration. T-bills currently yield 4 percent. a. Suppose thecurrent price of the company's stock is $70. What is the value ofthe call option if the exercise price is $60 per share? (Do notround intermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.) Value of the call option $ b. Suppose theexercise price is $80 and the current price of the company's stockis $70. What is the value of the call option now? (Do not roundintermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.) Value of the call option $
Other questions asked by students
Q
a) The internal records of the bank are very important sources of information to identify problem...
Finance
Advance Math
Q
Protocells comprised of fatty acids and nucleic acids have been created in the laboratory Where...
Biology
Accounting
Accounting