Expected gain for holder of european call option

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Reference no: EM132019091

Find the expected gain (or loss) for a holder of a European call option with strike price $80 to be excerised in 6 months if the stock price on the exercise time turns out to be $78, $83, or $88 with probability (1/3) each, given that the option is bought for $5 financed by a loan at 4% compounded continuously.

Reference no: EM132019091

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