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What is the value of the call option

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Reference no: EM133120044

The price of Ervin Corp. stock will either be $62 or $87 at the end of the year. Call options are available with one year until expiration. Continuously compounded T-bills currently yield 3.89 %. Suppose the current price of Ervin stock is $72.

What is the value of the call option if the strike price is $75 per share? (Round answer to 2 decimal places. Do not round intermediate calculations).

Reference no: EM133120044

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