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Suppose we want to know the price of a call option with; One year to maturity; A $120 exercise price; The current stock price is
Suppose we want to know the price of a call option with; One year to maturity; A $120 exercise price; The current stock price is $115; one-year risk-free rate is 10 percent; the existence of a put option with same exercise price. Also we know that the stock price will be $130 or $121 in one year. But We do not know the probabilities of these two values.
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