In the case of a 1-year option, the current stock price is $52 per share. If the stock price has an equal chance of ending the year at either $58 or $45, what is the ? given an interest rate of 6.0% and an exercise price of $50?

A)

0.2145

B)

0.3254

C)

0.5411

D)

0.6154

Answer:

D

Business

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