Imagine that Apple's stock price will either rise by 33.3% or fall by 25% over the next

Question:

Imagine that Apple's stock price will either rise by 33.3% or fall by 25% over the next six months (see Section 21-1). Recalculate the value of the call option (exercise price = $400) using
(a) The replicating method and
(b) The risk-neutral method.
Explain intuitively why the option value rises from the value computed in Section 21-1.
Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...