Use daily compounding-find price of call option on the stock

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Reference no: EM131058517

The current stock of a stock is $20. In one year the price will be either $26 or $16, the annual risk-free rate is 5%. Find the price of a call option on the stock that has a strike price of $21 and that expires in 1 year (hint: use daily compounding)

Reference no: EM131058517

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