Question: Consider the following binomial option pricing problem involving an American call. This call has two periods to go before expiring. Its stock price is 30,

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

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Su 301151 006 3243 Sd3091 006 2538 Su 32431153729 Sd 253809 2284 Sud 324309 o... View full answer

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