Risk-Neutral Valuation A stock is currently priced at $75. The stock will either increase or decrease by
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Risk-Neutral Valuation A stock is currently priced at $75. The stock will either increase or decrease by 15 percent over the next year. There is a call option on the stock with a strike price of $70 and one year until expiration. If the risk-free rate is 12 percent, what is the risk-neutral value of the call option? LO.1
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