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What are the prices of these options

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Reference no: EM132185138

A stock currently trades at $100, and its price can increase or decrease by 10% over the following year. The risk-free rate is 3% per year.

(a) We have call and put options written on this stock with strike prices of $105. What are the prices of these options?

(b) How many shares would you need to buy to replicate the call option; that is, what is ? of the call option?

Reference no: EM132185138

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