Finance Assignment | Professional Writing
May 21st, 2020
You are attempting to value a call option with an exercise price of $109 and one year to expiration. The underlying stock pays no dividends, its current price is $109, and you believe it has a 50% chance of increasing to $137 and a 50% chance of decreasing to $81.
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Finance Assignment | Professional Writing
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The risk-free rate of interest is 8%. Calculate the call option’s value using the two- state stock price model. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Value of the call option
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