Find price of a call option on stock that has exercise price
Problem
The current price of a stock is $50. In 1 year, the price will be either $65 or $35. The annual risk- free rate is 5%. Find the price of a call option on the stock that has an exercise price of $55 and that expires in 1 year.
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The annual risk- free rate is 5%. Find the price of a call option on the stock that has an exercise price of $55 and that expires in 1 year.
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