MC [4] MC stock is selling for 30 per share. It is expected that the stock price

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MC [4]

MC stock is selling for 30 per share. It is expected that the stock price will be either 25 or 35 in 6 months. Treasury bills that mature in 6 months yield 5%. (pa.). Use a state-price probability (for the "up" state) of 0.5741.

1. What is the price of an MC option with strike 32?

2. Is the stock priced correctly?

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Lectures On Corporate Finance

ISBN: B00RGENH5I

1st Edition

Authors: Peter L Bossaerts ,Bernt Arne Odegaard

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Question Posted: Oct 25, 2024 06:00 AM

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MC [4] MC stock is selling for 30 per share. It is expected that the stock price

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Lectures On Corporate Finance

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