Question: = - 6. Consider a one period binomial option pricing model where So = 2, d .5, r = .2 (simple interest for the period)

= - 6. Consider a one period binomial option pricing model

= - 6. Consider a one period binomial option pricing model where So = 2, d .5, r = .2 (simple interest for the period) for a call (S1 4)+ that is exercised at time one. Find the non-arbitrage price of the call option at t = 0. Find also the portion Ao of stock to be purchased at t = 0. = - 6. Consider a one period binomial option pricing model where So = 2, d .5, r = .2 (simple interest for the period) for a call (S1 4)+ that is exercised at time one. Find the non-arbitrage price of the call option at t = 0. Find also the portion Ao of stock to be purchased at t = 0

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