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derive the call option premium Binomial Model (Cont'd) 3.) The no-arbitrage condition requires that such a portfolio should cost zero today: - as Option premium
derive the call option premium 
Binomial Model (Cont'd) 3.) The no-arbitrage condition requires that such a portfolio should cost zero today: - as Option premium now + stock price now + borrow/ deposit now 0 => gives the option premium (- Cd + da S)/R C: Cuq + Ca(1-9) CE R where R-d q= => The Binomial model! u-d Step by Step Solution
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Fundamentals Of Contemporary Financial Management
Authors: R. Charles Moyer, James R. McGuigan, Ramesh P. Rao
2nd Edition
0324406363, 978-0324406368
