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What is price of price of a one-year European call option

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Reference no: EM132983721

Question - A stock price is currently priced at $65 and after one year it can go up 30% or down 22%. The risk-free rate is 8% per annum with continuous compounding. What is the price of price of a one-year European call option with exercise prices of $70?

a. $8.93

b. $7.81

c. None of the other answers provided is correct

d. $7.00

Reference no: EM132983721

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