Rapid Ltd stock is currently being sold for Rs 60. The call option on the...
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Rapid Ltd stock is currently being sold for Rs 60. The call option on the stock exercisable a year from now at an exercise price of Rs 55 is currently selling for Rs 15. The risk-free interest rate is 12%. The stock can either rise or fall after a year. It can fall by 30%. Using the Binomial Model calculate by what percentage can it rise?
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