The price of tara inc stock will be either s50 or 70 at the, Ask an Expert

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The price of Tara, Inc., stock will be either S50 or $70 at the end of the year. Call options are available with one year to expiration. The annual risk-free rate is 5 percent.

a. Suppose the current price of Tara stock is s62. What is the value of the call option if the exercise price is s35 per share?

b. Suppose the current price of Tara stock is $62. What is the value of the put option with one year to expiration if the exercise price is35 per share?

Please show your work stip by stip and show the formula

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92861148

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