Question: Consider a 1 -period binomial model with R = 1.02 , S 0 = 100 , u = 1 / d = 1.05 . Compute

Consider a1-period binomial model withR=1.02,S0=100,

u=1/d=1.05. Compute the value of a European call option on the stock

with strikeK=102. The stock does not pay dividends.

Please submit your answer rounded to two decimal places. So for example, if your answer is3.4567then you should submit an answer of3.46.

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