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Business, 03.12.2020 20:10 Geo777

The stock price of Apax Inc. is currently $105. The stock price a year from now will be either $130 or $90 with equal probabilities. The interest rate at which investors can borrow is 10%. Using the binomial OPM, the value of a call option with an exercise price of $110 and an expiration date 1 year from now should be worth today. a. $11.59.
b. $15.00.
c. $20.00.
d. $40.00.

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The stock price of Apax Inc. is currently $105. The stock price a year from now will be either $130...

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