Now extend the one-period binomial model to a two-period world.Answer questions 16 through 18.
-What is the current value of the call?
A)8.00
B)7.30
C)11.13
D)0.619
E)none of the above

Question

Quizplus · Accepted Answer

The current value of the call can be calculated using the Black-Scholes formula with the provided inputs. Using the formula, the value of the call is approximately $7.30. Therefore, the best choice is B.

Now Extend the One-Period Binomial Model to a Two-Period World