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We have a portfolio with digital options on AAPL. The current stock price for AAPL is $171.01 per share, the annualized interest rate is 3%,
We have a portfolio with digital options on AAPL. The current stock price for AAPL is $171.01 per share, the annualized interest rate is 3%, the annualized drift for AAPL is 5%, no dividend, and the constant volatility is 10%. The payoff of this option at maturity is: 1ST >= K.
Calculate the price of a digital call option on AAPL with strike 180 and maturity of 1 year
(Think about the proper range for the digital option's price, from the Put-Call Parity)
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