The current price stock XYZ is RM20. In 3 months, it will be either RM22 or RM18. A 3-month call option on XYZ stock has a strike price of 21. The risk-free rate is 12%.
Using binomial tree, estimate the intrinsic price (premium) of the 3-month call options.

Answer rating: 100% (QA)

To estimate the intrinsic price of the 3month call option using the Binomial Tree Method we need to ... View the full answer