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Business, 01.05.2021 01:40 toniawu18

The current spot price of a stock is $34, the expected rate of return of the stock is 8%, and the volatility of the stock is 20%. The risk-free rate is 3% for all times. Assume the stock pays a dividend of 25 cents in 2 months. Compute the price of a European call option on the stock with strike price $35 expiring in 4 months

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