Solved: This call has two periods to go before expiringits stock, Finance Basics

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This call has two periods to go before expiringits stock

Consider the following binomial option pricing problem involvingan American call. This call has two periods to go before expiring.Its stock price is 30, and its exercise price is 25. The risk-freerate is 0.05, the value of u is 1.15, and the value of d is 0.90.The stock pays a dividend at the end of the first period at therate of 0.06. Find the value of the call.

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Finance Basics: This call has two periods to go before expiringits stock

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