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The price of Build A Fire Corp. stock will be either $94 or $123 at the end of the year. Call options are available with one year to expiration. T-bills currently yield 2 percent. a. Suppose the current price of the company's stock is $105.
What is the value of the call option if the exercise price is $90 per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Value of the call option $
b. Suppose the exercise price is $120 and the current price of the company's stock is $105.
What is the value of the call option now? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
PLEASE FOLLOW INSTRUCTIONS ON ROUNDING DECIMALS
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