A stock price is currently 50 it is known that at the end, Ask an Expert

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A stock price is currently $50. It is known that at the end of six months it will be either $60 or $42. The risk-free rate of interest with continuous compounding is 12% per annum.

Calculate the value of a six-month European call option on the stock with an exercise price of $48.

Verify that no-arbitrage arguments and risk-neutral valuation arguments give the same answers.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92834165

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