The price of ervin corp stock will either be 65 or 88 at, Ask an Expert

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The price of Ervin Corp. stock will either be $65 or $88 at the end of the year. Call options are available with one year until expiration. Continuously compounded T-bills currently yield 4.51 %. Suppose the current price of Ervin stock is $75.

What is the value of the call option, using the risk-free approach, if the strike price is $55 per share? (Round answer to 2 decimal places. Do not round intermediate calculations).

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92717700

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