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Required: You are attempting to value a call option with an exercise price of $ 1 1 0 and one year to expiration. The underlying

Required:
You are attempting to value a call option with an exercise price of $110 and one year to expiration. The underlying stock pays no dividends, its current price is $110, and you believe it has a 50% chance of increasing to $130 and a 50% chance of decreasing to $90. The risk-free rate of interest is 10%. Consider one share of stock and two written calls. Calculate the call option's value using the two-state stock price model. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

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