The current price of caterpillar incs stock is 22 and at

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The current price of Caterpillar Inc.'s stock is $22, and at the end of one year its price is expected to be either $37 or $12. The annual risk-free rate is 1.5%, based on daily compounding. A 1-year call option on the stock, with an exercise price of $30, is available. Based on the binominal model, what is the option's value?

Reference no: EM13608571

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