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You have an underlying asset worth 50 dollars that will either go up in value, u=e 0.10 , or fall in value, d=e -0.10 ,
You have an underlying asset worth 50 dollars that will either go up in value, u=e0.10, or fall in value, d=e-0.10, in one period. You have a call option on this asset with a strike price of $51. Cu, which is the intrinsic value of the call when the underlying asset price goes up, is $____ and Cd, which is the intrinsic value of the call when the underlying asset price goes down, is $____.
$4.26, $0
$3.26, -$5.76
$4.26, -$5.76
$3.26, $0
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