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Problem 5-6 Binomial Model The current price of a stock is $20. In 1 year, the price will be either $26 or $16. The annual

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Problem 5-6 Binomial Model The current price of a stock is $20. In 1 year, the price will be either $26 or $16. The annual risk-free rate is 7%. Find the price of a call option on the stock that has a strike price is of $24 and that expires in 1 year (Hint: Use daily compounding.) Round your answer to the nearest cent. Assume 365-day year. Do not round your intermediate calculations

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