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QUESTION 20 Currently a call option on Bayou stock is available with an exercise price of 5100 and an expiration date one year from now.

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QUESTION 20 Currently a call option on Bayou stock is available with an exercise price of 5100 and an expiration date one year from now. Assume that the price of Bayou Corporation stook today 5100. Furthermore, it is estimated that you stock will be selling for other 567 or $141 in one year. Also, assume that the annual risk-free interest rate on a one year Treasury bilis 10 percent continuously compounded. Therefore, the T-bill will pay 5100 "(0.1), or $110.25 Find the call option premium using the Binomial model For example, if you find that the call option premium is 12.45 type this number in the box below

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