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Business, 17.04.2020 01:05 MartinTDL

The stock price of Ajax Inc. is currently $105. The stock price a year from now will be either $130 or $90 with equal probabilities. The interest rate at which investors can borrow is 10%. Using the binomial OPM, the value of a call option with an exercise price of $110 and an expiration date one year from now should be worth today.

Select one:

a. $11.59

b. $15.00

c. $20.00

d. $40.00

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