A stock with a current price of $18 will either move up by a factor of 1.2 or down by a factor of .9 each period over the next two periods. The risk-free rate of interest is 4.5%. What is the current value of a call option with a strike price of $20?
A)$1.02
B)$1.08
C)$1.17
D)$1.21
E)$1.27

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The Answer of A stock with a current price of $18 will either move up by a factor of 1.2 or down by a factor of .9 each period over the next two periods. The risk-free rate of interest is 4.5%. What is the current value of a call option with a strike price of $20?
A)$1.02
B)$1.08
C)$1.17
D)$1.21
E)$1.27

A Stock with a Current Price of $18 Will Either