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3. A stock is currently selling for $45 and during the next three months you expect a stock to either go up to $60 or

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3. A stock is currently selling for $45 and during the next three months you expect a stock to either go up to $60 or drop to $35. A call option for this stock is available with a strike of $45. The current risk free rate is 3%. Calculate the option premium using the Binomial pricing model. (12 pts.)

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