Question
You are thinking about investing in a 1-year call option on GE stock with an exercise price of 103.5. The current price of a stock
You are thinking about investing in a 1-year call option on GE stock with an exercise price of 103.5. The current price of a stock is $100, and at the end of one year its price will be either $106 or $96. Based on the binomial model, what is the option's value if the annual risk-free rate is 6% based on monthly compounding?
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Fundamentals Of Investing
Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk
13th Edition
978-0134083308, 013408330X
