Question: 4. (15 points) In binomial option-pricing model, the risk-free interest rate is used in calculating the present value of a portfolio containing an option and

4. (15 points) In binomial option-pricing model, the risk-free interest rate

4. (15 points) In binomial option-pricing model, the risk-free interest rate is used in calculating the present value of a portfolio containing an option and A number of shares. Explain why only risk-free rate is used in this method

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