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What is the option value

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The current price of a stock is $22, and at the end of one year its price will be either $29 or $15. The annual risk-free rate is 5.0%, based on daily compounding. A 1-year call option on the stock, with an exercise price of $21, is available. Based on the binominal model, what is the option's value?

Reference no: EM132951793

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