4. The stock price of a company is currently $50, and the price can either increase...
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4. The stock price of a company is currently $50, and the price can either increase by 10% or decrease by 5% in each of the next two years. There is a two-year European call option on the stock with a strike price of $54. Calculate the price of the option assuming a risk-free interest rate of 4% and plot the binomial tree with the estimated final and intermediate option prices at each node. 4. The stock price of a company is currently $50, and the price can either increase by 10% or decrease by 5% in each of the next two years. There is a two-year European call option on the stock with a strike price of $54. Calculate the price of the option assuming a risk-free interest rate of 4% and plot the binomial tree with the estimated final and intermediate option prices at each node.
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