The current price of a stock is 20 in 1 year the price will, Accounting Basics

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The current price of a stock is 20 in 1 year the price will

Question: The current price of a stock is $20. In 1 year, the price will be either $26 or $16. The annual risk-free rate is 5 percent. Find the price of a call option on the stock that has an exercise price of $21 and that expires in 1 year. (Hint: Use daily compounding.)

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Accounting Basics: The current price of a stock is 20 in 1 year the price will

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