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Nondividend-paying stock

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Reference no: EM133119929

For a nondividend-paying stock, you are given the following:

i) The current price of the stock is 50

ii) In one year, the stock will either go up to 55 or down to 46

iii) The continuously compounded risk-free interest rate is 4%

iv) The current price of a 1-year 51-strike European call on the stock is 2.60

Which is the following statement is true?

Reference no: EM133119929

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