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You Own One Call Option with an Exercise Price of €30

question 18

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You own one call option with an exercise price of €30 on Nadia Interiors.This is currently selling for €27.80 a share but is expected to increase to either €28 or €34 a share over the next year.The risk-free rate of return is 5% and the inflation rate is 3%.What is the current value of your option if it expires in one year?


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