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Consider a binomial world in which the current stock price of 100 can either go up by 10 percent or down by 8 percent. The
Consider a binomial world in which the current stock price of 100 can either go up by 10 percent or down by 8 percent. The risk-free rate is 4 percent. Assume a one-period world. An exercise price is 90.
What would be the call's price at time 1 if the stock goes up ?
Group of answer choices
4.39
5.71
20.00
3.60
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