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Calculating option values

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1. Calculating Option Values

T-bills currently yield 4.3 percent. Stock in Nina Manufacturing is currently selling for $67 per share. There is no possibility that the stock will be worth less than $60 per share in one year.

a.  What is the value of a call option with a $55 exercise price? What is the intrinsic value?

b.  What is the value of a call option with a $45 exercise price? What is the intrinsic value?

c.  What is the value of a put option with a $55 exercise price? What is the intrinsic value?

Reference no: EM131473847

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