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9. Consider a binomial world in which the current stock price of 80 can either go up by 10 percent or down by 8 percent.
9. Consider a binomial world in which the current stock price of 80 can either go up by 10 percent or down by 8 percent. The risk-free rate is 4 percent. Assume a one-period world. Answer questions 9 through 11 about a call with an exercise price of 80. What would be the call's price if the stock goes up? a. 3.60 b. 8.00 c. 5.71 d. 4.39 e. none of the above
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