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A stock is currently selling for $46. In one period, the stock will move up by a factor of 1.23 or down by a factor
A stock is currently selling for $46. In one period, the stock will move up by a factor of 1.23 or down by a factor of .61. A call option with a strike price of $54 is available. If the risk-free rate of interest is 2.5 percent for this period, what is the value of the call option? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
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To calculate the value of the call option you can use the oneperiod binomial option pricing ...
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Fundamentals of Investments Valuation and Management
Authors: Bradford Jordan, Thomas Miller
7th edition
978-0078096785, 78096782, 978-0077861636, 77861639, 978-0078115660
