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The common stock of Riddle Distribution is currently priced at $18.50 per share and expected share prices a year from now are expected to be
The common stock of Riddle Distribution is currently priced at $18.50 per share and expected share prices a year from now are expected to be either $16 or $22 per share. The risk-free rate of return is 1.4 percent.
What is the current value of a one-year call option on this stock if the exercise price is $20?
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