Data s0 120 x 132 1 r 11 the two possibilities for st, Ask an Expert

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Data: S0 = 120; X = 132; 1 + r = 1.1. The two possibilities for ST are 150 and 96.

Calculate the value of a call option on the stock with an exercise price of $132. (Do not use continuous compounding to calculate the present value of X in this example because we are using a two-state model here, not a continuous-time Black-Scholes model.)

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