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Suppose that you have been offered two packages. Package A contains 1000 call options at strike price of $182. Package B contains 100 call options
Suppose that you have been offered two packages. Package A contains 1000 call options at strike price of $182. Package B contains 100 call options at strike price of $80. You can accept either package A or package B or you can reject both. Suppose stock price next year could be $100 with probability 0.75 and $200 with probability 0.25. What is the expected value of package B?
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