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What is the value of the six- month european call option

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Reference no: EM132887561

Problem 1: A stock price is currently $15. Over each of the next two three- month periods it is expected to go up by 6% or down by 5%. The risk- free interest rate is 5% per annum with continuous compounding. Suppose this option has a strike price of K dollars, where K equals to the total number of letters in your first and last name. For example, if your name is Warren Buffett, then K=13 Dollars. What is the value of this six- month European call option?

Reference no: EM132887561

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