What is the option value, The annual risk-free rate is

What is the option value

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Reference no: EM13282496

The current price of a stock is $22, and at the end of one year its price will be either $27 or $17. The annual risk-free rate is 6.0%, based on daily compounding. A1-year call option on the stock, with an exercise price of $22, is available. Based on the binomial model, what is the option's value.

Reference no: EM13282496

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