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A stock currently trading at $8 will be either $6.50 or $10 in one year. A call option is available with an exercise price of
A stock currently trading at $8 will be either $6.50 or $10 in one year. A call option is available with an exercise price of $7.50. If the annual interest rate is 8 percent, what is the value of this call option? Multiple Choice $0.75 $1.42 $1.00 $0.62 O $0.75 O O $1.42 O $1.00 $0.62 $0.42
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International Financial Management
Authors: Jeff Madura
3rd Edition
0314862722, 978-0314862723
