Question: (20 points) Suppose So = 4, u = 2, d = 1 and r = - 4. Let N = 2. Consider an European call

(20 points) Suppose So = 4, u = 2, d =

(20 points) Suppose So = 4, u = 2, d = 1 and r = - 4. Let N = 2. Consider an European call option with strike price K = 5. Evaluate Vo, V1, V2. Comparing with the previous question, what do you see? (20 points) Suppose So = 4, u = 2, d = 1 and r = - 4. Let N = 2. Consider an European call option with strike price K = 5. Evaluate Vo, V1, V2. Comparing with the previous question, what do you see

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