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Calculate the minimum return on the stock

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Reference no: EM133002145

Suppose a share of stock sells for $55. The risk-free rate is 6 percent, and the stock price in one year will be either $61 or $71.

a.What is the value of a call option with a $61 exercise price?

Call option value$

b.Calculate the minimum return on the stock required to get the option in the money. (Round your answer to 2 decimal places. (e.g., 32.16))

Minimum stock return %

Reference no: EM133002145

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