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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 ?

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4.39

5.71

20.00

3.60

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