The price of a non dividend pay stock is 60 use a two step, Ask an Expert

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The price of a non dividend pay stock is 60$. Use a two step tree to value a European call option on the stock with a strike price of 60$ that expires in 6 months. The risk free rate is 5% with continuous compounding. Assume that the option is written on 100 shares of stock, and that u=1.15 and d=0.85.

What is the option price today?

How would you hedge a position where you buy the call option today?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92870562

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