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You own a lot in Key West, Florida, that is currently unused. Similar lots have recently sold for $ 1 , 2 7 0 ,
You own a lot in Key West, Florida, that is currently unused. Similar lots have recently sold for $ Over the past five years, the price of land in the area has increased percent per year, with an annual standard deviation of percent. A buyer has recently approached you and wants an option to buy the land in the next months for $ The riskfree rate of interest is percent per year, compounded continuously. How much should you charge for the option?
Note: Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to decimal places, eg
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