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Solve the price of a two-year call option on mmx stock

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Reference no: EM132762821

Problem 1: The current price of MMX Corporation stock is $10. In each of the next two years, this stock price can either go up by $3.00 or go down by $2.00. MMX stock pays no dividends. The one-year risk-free interest rate is 5% and will remain constant. Using the binomial pricing model, calculate the price of a two-year call option on MMX stock with a strike price of $9.

Reference no: EM132762821

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