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2. A stock price is currently $50. Over each of the next two three-month periods it is expected to go up by 8% or down
2. A stock price is currently $50. Over each of the next two three-month periods it is expected to go up by 8% or down by 5%. The risk-free interest rate is 4% per annum with continuous compounding. What is the value of a six-month European call option with a strike price of $50? Use binomial tree method to solve this
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