The price of Ervin Corp. stock will be either $90 or $116 at the end of...

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Finance

The price of Ervin Corp. stock will be either $90 or $116 at theend of the year. Call options are available with one year toexpiration. T-bills currently yield 5 percent.

a.
Suppose the current price of the stock is $99. What is the valueof the call option if the exercise price is $85 per share?(Do not round intermediate calculations and round youranswer to 2 decimal places, e.g., 32.16.)
b. Suppose the exercise price is $110 and the stock price is $99.What is the value of the call option now? (Do not roundintermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.)

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The price of Ervin Corp. stock will be either $90 or $116 at theend of the year. Call options are available with one year toexpiration. T-bills currently yield 5 percent. a.Suppose the current price of the stock is $99. What is the valueof the call option if the exercise price is $85 per share?(Do not round intermediate calculations and round youranswer to 2 decimal places, e.g., 32.16.)b.Suppose the exercise price is $110 and the stock price is $99.What is the value of the call option now? (Do not roundintermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.)

a.	Suppose the current price of the stock is $99. What is the valueof the call option if the exercise price is $85 per share?(Do not round intermediate calculations and round youranswer to 2 decimal places, e.g., 32.16.)
b.	Suppose the exercise price is $110 and the stock price is $99.What is the value of the call option now? (Do not roundintermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.)