A prominent securities firm recently introduced a new financial product. This product, called The Best of Both Worlds (BOBOW for short), costs $10. It matures in 5 years, at which point it repays the investor the $10 cost plus 120% of any positive return in the S&P 500 index. There are no payments before maturity. For example: If the S&P 500 is currently at 1,500, and if it is at 1,800 in 5 years, a BOBOW owner will receive back $12.40 = $10*[1 + 1.2*(1800/15001)]. If the S&P is at or below 1,500 in 5 years, the BOBOW owner will receive back $10.Suppose that the annual interest rate on a 5-year, continuously compounded, pure-discount bond is 6%. Suppose further that the S&P 500 is currently at 1,500 and that you believe that in 5 years it will be at either 2,500 or 1,200. Use the binomial option pricing model to show that BOBOWs are underpriced.

Under the given assumptions, BOBOW, the new financial product, is underpriced by $1.1851. Now the securities firm wants to reduce the product's plus part, which is currently 120%, to remove the underpricing. What should be the revised number if the firm still wants to sell the product for $10 (format: 98.7654)