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In the Case of a 1-Year Option,the Current Stock Price

Question 3

Multiple Choice

In the case of a 1-year option,the current stock price is $52 per share.If the stock price has an equal chance of ending the year at either $58 or $45,what is the △ given an interest rate of 6.0% and an exercise price of $50?


A) 0.2145
B) 0.3254
C) 0.5411
D) 0.6154

Correct Answer:

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