Calculate the price of a call option on stock

Reference no: EM13288534

Calculate the price of a call option on stock of Dynamic Inc. given the following information: the current price of a share of Dynamic Inc. is $60. The strike price is $75 and the risk free rate is r=5% APR. The option expires in 2 years. Suppose the price of the stock will either up to $90 (with probability p=.65) or go down to $50 (with probability q=.35).

Reference no: EM13288534

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