Call option with a strike price

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The current price of a stock is $99. In the next year, it is assumed that the stock price can be either $140 or $60. If the one-year interest rate is 5% (simple interest), then according to the simplified (binomial) option pricing model, what should the price (premium) of a 1-year call option with a strike price of $100 be?

Reference no: EM133000533

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