Question: Consider a binominal model for a forward contract. The price of a one-year call option on the forward contract is 9.7862. The risk-neutral probability of

Consider a binominal model for a forward contract. The price of a one-year call option on the forward contract is 9.7862. The risk-neutral probability of a downward move is 1/4.The initial forward price is 100. The continuously compounded risk-free interest rate is 7%. Calculate u.

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