Question: Consider a four-period binomial model in which a stock currently trades at a price of sh.31. The stock price can go up 11 percent or

Consider a four-period binomial model in which a stock currently trades at a price of sh.31. The stock price can go up 11 percent or down 9.5 percent each period. The risk-free rate is 5 percent per period. Calculate the price of a European call option expiring in four periods with an exercise price of Ksh.32

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