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You are attempting to value a call option with an exercise priceof $104 and one year to expiration. The underlying stock pays nodividends, its current price is $104, and you believe it has a 50%chance of increasing to $118 and a 50% chance of decreasing to $90.The risk-free rate of interest is 11%. Calculate the call option’svalue using the two-state stock price model. (Do not roundintermediate calculations and round your final answer to 2 decimalplaces.)
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