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Currently, a call option on Bayou stock is available with an exercise price of $100 and an expiration date one year from now. Assume that

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Currently, a call option on Bayou stock is available with an exercise price of $100 and an expiration date one year from now. Assume that the price of Bayou Corporation stock today is $100. Furthermore, it is estimated that Bayou stock will be selling for other 568 or $153 in one year Also, assume that the annual risk-free interest rate on a one-year Treasury bill is 10 pocent, continuously compounded. Therefore, the T-bill will pay 5100/01)or $110.25 Find the call option premium using the Binomial model For example, you find that the call option premium is 12 45 type this number in the box below

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