T-bills currently yield 3.4 percent. Stock in Deadwood 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?
