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Problem 21-37 You are attempting to value a call option with an exercise price of $108 and one year to expiration. The underlying stock pays
Problem 21-37 You are attempting to value a call option with an exercise price of $108 and one year to expiration. The underlying stock pays no dividends, its current price is $108, and you believe it has a 50% chance of increasing to $129 and a 50% chance of decreasing to $87. The risk-free rate of interest is 10%. Calculate the call option's value using the two-state stock price model. (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Value of the call option
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