Question
The current price of a stock is $80, and at the end of one year its price will be either $88 or $72. The annual
The current price of a stock is $80, and at the end of one year its price will be either $88 or $72. The annual risk-free rate is 3.0%, based on daily compounding. Based on the binominal model, what is the present value for a 1-year call option on this stock with an exercise price of $86?
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Introductory Econometrics For Finance
Authors: Chris Brooks
4th Edition
110843682X, 9781108436823
