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A stock is selling for $32.70. The strike price on a call, maturing in 6 months, is $35. The possible stock prices at the end
A stock is selling for $32.70. The strike price on a call, maturing in 6 months, is $35. The possible stock prices at the end of 6 months are $39.50 and $28.40. The stock pays no dividends. Continuous compounded interest rates are 6.0%.What are the up factoruand down factordof the stock prices according to the Binomial Model?
1.1286, 0.8114
1.2080, 0.8685
0.8685, 1.2080
0.8114, 1.1286
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