Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:100
Stock
137
51
100
Bond (IF=3%)
103
103
1-year call option, S=100, E=87, r₁=3% (annual)
1 step per year
How much should the call option worth?
Call (E=87)
50
0
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