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A stock is priced at 40 and the periodic risk-free rate of interest is 8%. The...

A stock is priced at 40 and the periodic risk-free rate of interest is 8%. The value of a two-period
European call option with a strike price of 37 on a share of stock using a binomial model with an up
factor of 1.20 and a down factor of 0.833 is closest to:
A) $9.13. C) $3.57.
B) $9.25.

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