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DOG bill currently yield 4.8 percent. Stock in CAT Manufacturing is currently selling for $63...

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Accounting

DOG bill currently yield 4.8 percent. Stock in CAT Manufacturing is currently selling for $63 per share. There is no possibility that the stock will be worth less than $61 per share in one year.

a) What is the value of a put option with a $50 exercise price? What is the intrinsic value?

b) What is the value of a put option with a $70 exercise price? What is the intrinsic value?

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