The price of Newgen Corp. stock will be either $94 or $103 at the end of the year. Call options are available with one year to expiration. T-bills currently yield 7.90%. (Do not leave any empty spaces; input a 0 wherever it is required. Omit "$" sign in your response.) a. Suppose the current price of Newgen stock is $104. What is the value of the call option if the exercise price is $94 per share? (Round the final answer to 2 decimal places.) Call option value $ b. Suppose the exercise price is $109 in part (a). What is the value of the call option now? Call option value $
The price of Newgen Corp. stock will be either $94 or $103 at the end of the year. Call options are available with one year to expiration. T-bills currently yield 7.90%. (Do not leave any empty spaces; input a 0 wherever it is required. Omit "$" sign in your response.) a. Suppose the current price of Newgen stock is $104. What is the value of the call option if the exercise price is $94 per share? (Round the final answer to 2 decimal places.) Call option value $ b. Suppose the exercise price is $109 in part (a). What is the value of the call option now? Call option value $
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:The price of Newgen Corp. stock will be either $94 or $103 at the end of the year. Call options are available with one year to
expiration. T-bills currently yield 7.90%. (Do not leave any empty spaces; input a O wherever it is required. Omit "$" sign in your
response.)
a. Suppose the current price of Newgen stock is $104. What is the value of the call option if the exercise price is $94 per share?
(Round the final answer to 2 decimal places.)
Call option value
b. Suppose the exercise price is $109 in part (a). What is the value of the call option now?
Call option value
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