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QUESTION
A stock is currently priced at $35. A call option with an expiration of one year has an exercise price of $50.
A stock is currently priced at $35. A call option with an expiration of one year has an exercise price of $50. The risk-free rate is 7 percent per year, compounded continuously, and the standard deviation of the stock’s return is infinitely large. What is the price of the call option?
