I am editing this question because it was originally unclear, and I didn't get the answers I was hoping for.
In my finance book I have the following question
T-bills currently yield 5.5 percent. Stock in Maria's Manufacturing is currently selling for $70 per share.
There is no possibility that the stock will be worth less than $65/share in one year.
What is the value of a call option with a $60 exercise price? The answer book is: C0=70–[60/1.055] = 13.13. I don't understand how the option price was found like this. We don't know the volatility for the stock, so how is it possible to calculate the option price. Does it have something to do with the fact that the option will definitely be exercised?
Thanks a lot for your help.