A binary option pays off $165 if a stock price is greater than $65 in three months.
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A binary option pays off $165 if a stock price is greater than $65 in three months. The current stock price is $50 and its volatility is 40%. The risk-free rate is 4% and the expected return on the stock is 10%. Note that some of the subsequent values were assumed and not calculated.
What will the value of the option be if N(-d2) were determined to be 0.1072? The value of the option is $ .
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