the current price of the tiger

timer Asked: Dec 9th, 2015

Question description

the current price of the tiger company stock is $20. In one year th price will either be $25 of $15. The annual risk-free rate is 5%. Using the binomial method, Find the price on a call option on the stock that has a strike price of $21, and that expires in one year. (use continuous discounting, and show the binomial diagram)

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