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A power option pays off [max(ST K), 0]2 at time T where ST is the stock price at time T and K is the strike

A power option pays off [max(ST K), 0]2 at time T where ST is the stock price at time T and K is the strike price. Consider the situation where K = 26 and T is one year. The stock price is currently $24 and at the end of one year it will be either $30 or $18. The risk-free interest rate is 5% What is the value of the power option?

a.5.58

b.10.58

c.9.17

d.4.58

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