A stock price is currently $50. It is known that at the end of 6 months it will be either $60 or $45. The risk-free rate of interest with continuous compounding is 10% per annum, Calculate the value of a 6-month European call option on the stock with an exercise price of $48. Verify that no arbitrage argument and the risk-neutral valuation arguments give the same answers

The former chairman of the federal reserve, alan greenspan, used the term "irrational exuberance" in 1996 to describe the high levels of optimism among stock market investors at the time. stock market indexes such as the s& p composite price index were at an all-time high. some commentators believed that the fed should intervene to slow the expansion of the economy. why would central banks want to clamp down when the economy is growing? a. to block the formation of unsustainable speculative asset bubbles. b. to curtail excessive profits in the banking system. c. to prevent inflationary forces from gathering momentum. d. all of the above. e. a and c only.