Question: 14) Use the binomial option pricing model to find the value of a call option on 10,000 with a strike price of 10,000 (.e., 1GBP

 14) Use the binomial option pricing model to find the value

14) Use the binomial option pricing model to find the value of a call option on 10,000 with a strike price of 10,000 (.e., 1GBP = 1EUR). The current exchange rate is 1.50/1.00 and in the next period the exchange rate can increase to C2.40/ or decrease to 0.9375/1.00 (1.e. u = 1.6 and d = 1/4 = 0.625). The current interest rates are i = 3% and are i = 4%

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