Question
The current price of a stock is $30, and at the end of one year its price will be either $33 or $27. The annual
The current price of a stock is $30, and at the end of one year its price will be either $33 or $27. The annual risk-free rate is 3.0%, based on daily compounding. Based on the binominal option pricing model, what is the present value of a 1-year call option with an exercise price of $26?
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Management Research Methods
Authors: Phyllis Tharenou, Ross Donohue, Brian Cooper
1st Edition
0521694280, 9780521694285
