A stock currently trades at a price of $100. The stock price can go up 10 percent or down 15 percent. The risk-free rate is 6.5 percent for the period.?Use a one-period binomial model to calculate the price of a call option with an exercise price of $90.?

We did a version of this in class, but it does not hurt to go through the exercise carefully one more time.?

(a) Draw a one-step binomial tree using the information above. Clearly label both, the stock price and the option price at the outer nodes.?