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The stock is currently trading at $25. It is expected that the stock will be either $23 or $27. Assume that the risk-free interest rate with continuous compounding is 10%. Which of the following gives the closest value of an exotic option that pays off St² at the end of six months?

a) $600

b) $620

c) $640

d) $660

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91822566

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