There are six primary factors that influence the price of an option, and you only list two of them. Check the procedure for options pricing as shown in Figure 2 and the discussion in the link below:

http://www.investopedia.com/university/o...

The price of Newgen Corp. stock will be either $53 or $84 at the end of the year. Call options are available with one year to expiration. T-bills currently yield 6 percent.

a) Suppose the current price of Newgen stock is $85. What is the value of the call option if the exercise price is $75 per share?

b) Suppose the exercise price is $90 in part (a). What is the value of the call option now?

For Part a) How are you supposed to do this question if the two options for the price of the stock at the end of the year are both less than $85 (the current price of the stock)?

Thank you!