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6. The value of a project is $100 and the cost at t=0 is $104. The project value follows a binomial model. It could go

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6. The value of a project is $100 and the cost at t=0 is $104. The project value follows a binomial model. It could go up to $180 or down to $60. The government posts a guarantee of $78 at time 1. What is the value of the option? The required rate of return is 20% and the risk-free rate is 88 per period

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