The price of Chive Corp. stock will be either $57 or $84 at the end of the year. Call options are available with one year to expiration. T-bills currently yield 4 percent. a. Suppose the current price of the company’s stock is $65. What is the value of the call option if the exercise price is $50 per share? b. Suppose the exercise price is $60 in part (a). What is the value of the call option now?
