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What should the price of the new exotic option be

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Reference no: EM133044234

Problem - You are asked to create an exotic option which pays $1 if the price of the underlying exceeds the $50 strike price at maturity, and nothing otherwise. A plain vanilla call for the same underlying is priced at $25, and a Binary Stock-or-Nothing call is priced at $50 - for the same strike and maturity. What should the price of the new exotic option be, in dollars and cents?

Reference no: EM133044234

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