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1. A non-dividend paying stock price is currently $50. Its 1-year expected volatility is 14.3% and the risk-free interest rate is 10% per annum (compounded
1. A non-dividend paying stock price is currently $50. Its 1-year expected volatility is 14.3% and the risk-free interest rate is 10% per annum (compounded continuously). a) Use a 1-step binomial tree to find the value of a two-month European call option with a strike price of $49?
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