Use the binomial option pricing model

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Reference no: EM132025758

The stock of LMK is worth $20. You are looking at buying a call option with a strike price also at $20 that expires in one year. If the stock price can either be $23 or $17 in a year from now, what is the option worth today if the one year risk free rate is 5%. Use the binomial option pricing model to find this value.

Reference no: EM132025758

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