Question: Consider a simple one-period binomial framework, where a stock currently trading at $50 per share may either increase in value by 3% or decrease in

Consider a simple one-period binomial framework, where a stock currently trading at $50 per share may either increase in value by 3% or decrease in value by 3% (simple). This stock does not currently pay dividends, and the riskless rate per period is rf=4%.

What is the price of a one-period call option on this stock with a strike of $55?

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