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While we know nothing about the odds of these two prices

We are looking at a stock call option with one year to expire and an exercise price of $60. The underlying stock currently sells for $50 and the annual risk-free rate is 10%. The value of the stock will either be $40 or $80 in a year. While we know nothing about the odds of these two prices, use the risk-neutral approach to determine the value of the option today.

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Basic Statistics: While we know nothing about the odds of these two prices

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Basic Statistics: While we know nothing about the odds of these two prices

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