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QUESTION
The stock price of Ajax Inc. is currently $100. The stock price a year from now will be either $113 or $89 with equal probabilities. The interest...
The stock price of Ajax Inc. is currently $100. The stock price a year from now will be either $113 or $89 with equal probabilities. The interest rate at which investors can borrow is 10%. Using the binomial OPM, the value of a call option with an exercise price of $101 and an expiration date one year from now should be worth __________ today.
