In two-months the price of stock will be either $23 or $27. The risk-free interest rate is 10%. The current price of the stock is $25. Suppose the price of the stock will be ST at the end of the...

In two-months the price of stock will be either $23 or $27. The risk-free interest rate is<br>10%. The current price of the stock is $25. Suppose the price of the stock will be ST at the<br>end of the two-months and the derivative on the stock will pays off Sr?. Find the value of<br>the derivative.<br>(A) $621.39<br>(B) $729.39<br>(C) $529.39<br>(D) $639.26<br>

Extracted text: In two-months the price of stock will be either $23 or $27. The risk-free interest rate is 10%. The current price of the stock is $25. Suppose the price of the stock will be ST at the end of the two-months and the derivative on the stock will pays off Sr?. Find the value of the derivative. (A) $621.39 (B) $729.39 (C) $529.39 (D) $639.26

Jun 04, 2022

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In two-months the price of stock will be either $23 or $27. The risk-free interest rate is 10%. The current price of the stock is $25. Suppose the price of the stock will be ST at the end of the...

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