Question: Please adhere to rounding instructions when completing the problem. It will be incorrect if it is not completed in this fashion. Thanks! D Question 10

Please adhere to rounding instructions when completing the problem. It will be incorrect if it is not completed in this fashion. Thanks!

Please adhere to rounding instructions when completing the problem. It will be

D Question 10 2 pts The price of Ervin Corp. stock will either be $64 or $88 at the end of the year. Call options are available with one year until expiration. Continuously compounded T-bills currently yield 3.80 %. Suppose the current price of Ervin stock is $77. What is the value of the call option if the strike price is $75 per share? (Round answer to 2 decimal places. Do not round intermediate calculations) Topic: Two-State Binomial Option Pricing 8.31

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