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26) You are thinking about investing in a 1-year call option on GE stock with an exercise price of $15.5. The current price of a

26) "You are thinking about investing in a 1-year call option on GE stock with an exercise price of $15.5. The current price of a stock is $12, and at the end of one year its price will be either $18 or $8. Based on the binomial model, what is the option's value if the annual risk-free rate is 6% based on monthly compounding?"

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