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2. The stock of Eastern Cellular, a manufacturer of cell phones, sells for $30 per share. Options exist that permit the holder to buy one

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2. The stock of Eastern Cellular, a manufacturer of cell phones, sells for $30 per share. Options exist that permit the holder to buy one share of Western at an exercise price of $26. These options will expire at the end of 3 months, at which time Eastern's stock will be selling at one of two prices, $20 or $40. Also, the risk-free rate is 8%. Based on these assumptions find the value of a call option on Eastern Cellular

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