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A stock price is $50 now. In one month it can go 10% up or down. In the second month it can go 10% up or down. The annual interest rate is 10% with continuous compounding. Use risk- free portfolios to determine the value of:

a) A two-month European call with strike price 50

b) A two-month European call with strike price 52

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92814067

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