Question
The current price of a stock is $21. In 1 year, the price will be either $30 or $15. The annual risk-free rate is 7%.
The current price of a stock is $21. In 1 year, the price will be either $30 or $15. The annual risk-free rate is 7%. Find the price of a call option on the stock that has a strike price of $24 and that expires in 1 year. (Hint: Use daily compounding.) Assume a 365-day year. Do not round intermediate calculations. Round your answer to the nearest cent.
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The Municipal Budget Crunch A Handbook For Professionals
Authors: Roger L. Kemp
1st Edition
0786463740, 978-0786463749
