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You are attempting to value a call option with an exercise price of $107 and one...

You are attempting to value a call option with an exercise price of $107 and one year to expiration. The underlying stock pays no dividends, its current price is $107, and you believe it has a 50% chance of increasing to $125 and a 50% chance of decreasing to $89. The risk-free rate of interest is 8%. Calculate the call option’s value using the two-state stock price model.

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SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

jeff jeffy answered 1 year ago
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