Question
A stock is currently selling for $40. Over the next two periods, the stock will move up by a factor of 1.31 or down by
A stock is currently selling for $40. Over the next two periods, the stock will move up by a factor of 1.31 or down by a factor of .89 each period. A call option with a strike price of $50 is available. If the risk-free rate of interest is 3.2 percent per period, what is the value of the call option?
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Dividend Growth Investing Machine
Authors: Andrew P.C.
1st Edition
1521728461, 978-1521728468
