The current price of a stock is $20. In 1 year, the price will be either $26

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The current price of a stock is $20. In 1 year, the price will be either $26 or

$16. The annual risk-free rate is 5%. Find the price of a call option on the stock that has a strike price of $21 and that expires in 1 year.

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Intermediate Financial Management

ISBN: 9781337395083

13th Edition

Authors: Eugene F. Brigham, Phillip R. Daves

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Question Posted: Mar 10, 2024 12:00 AM

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The current price of a stock is $20. In 1 year, the price will be either $26

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Intermediate Financial Management

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