1.14. An asset is initially priced at $50. The exercise price of a call option on this...

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1.14. An asset is initially priced at $50. The exercise price of a call option on this asset is also $50. Assume that the asset price moves up by 25% or down by 20% per year. The call option is offered for sale at $8. Use a one-period binomial model to estimate the interest rate for bonds that would make this the correct value for the call option.

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