The prevailing risk-free rate is 3 value an american call, Financial Management

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The prevailing risk-free rate is 3 value an american call

Stocks of the Binomial Inc. are currently $50 per share and it is known that its stock price will either increase by 15% per year or decrease by 25% per year, independently for the next two years. The prevailing risk-free rate is 3%. Value an American call option on the stock with two years of life and an exercise price of $53.

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