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Value of a call option using binomial opm

Assignment:

The stock price of Ajax Inc. is currently $105. The stock price a year from now will be either $130 or $90 with equal probabilities. The interest rate at which investors can borrow is 10%. Using the binomial OPM, the value of a call option with an exercise price of $110 and an expiration date one year from now should be worth __________ today.

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Finance Basics: Value of a call option using binomial opm

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Finance Basics: Value of a call option using binomial opm

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