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What is the current value of a call option with an exercise

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Reference no: EM132746889

Suppose Franck's stock price is currently $20. In the next six months it will either fall to $10 or rise to $30.

Problem a) What is the current value of a call option with an exercise price of $15?

Problem b) What is the current value of a put option with an exercise price of $15?

The six-month risk-free interest rate is 5 percent per six-month period. Solve using Risk Neutrality

Reference no: EM132746889

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