Question: Required: You are attempting to value a call option with an exercise price of $ 9 0 and one year to expiration. The underlying stock

Required:
You are attempting to value a call option with an exercise price of $90 and one year to expiration. The underlying stock pays no
dividends, its current price is $90, and you believe it has a 50% chance of increasing to $125 and a 50% chance of decreasing to $55.
The risk-free rate of interest is 7%. Consider one share of stock and two written calls. Calculate the call option's value using the two-
state stock price model. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Value of the call
Required: You are attempting to value a call option with an

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