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Define recalculate the value of a call option

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Reference no: EM131730180

An ordinary share is currently priced at sh 30

An option exists on this share with a strike price of sh 25 and one year to expiration. The volatility of the stock returns is 50%. The risk free rate is 8%.

Required

Using a two step binomial tree calculate the value of the call option.

Recalculate the value of a call option using the Black Scholes option pricing model.

Reference no: EM131730180

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