Question: A B C D E F G H J K 165 166 167 Question 8 (10 points) 168 Consider a stock worth $65 that can

A B C D E F G H J K 165

A B C D E F G H J K 165 166 167 Question 8 (10 points) 168 Consider a stock worth $65 that can go up or down by 25% per period. The risk free rate is 5%. And exercise price is $62. Use one Binomial Option Pricing Methods (both methods - Method 1 (6 steps) and Method 2 (the probability concept) to calculate the call premium 169 170 171 172 173 METHOD 1 (enter the answer of each step) 174 Step 1 = 175 Step 2 = 176 Step 3 = 177 Step 4 = 178 Step 5 = 179 Premium = 180 181 METHOD 2 182 Premium 183

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