The current price of a stock is $30, and at the end of one year its price will be either $36 or $24. The annual
The current price of a stock is $30, and at the end of one year its price will be either $36 or $24. The annual risk-free rate is 1.5%, 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 $28?
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Authors: Louis Gapenski
5th Edition
1567936113, 978-1567936117
