Question: Consider n-step binomial model with 1-asset such that S(0) = 100, D = 0.95, R = 1.04 and U = 1.08. Let K = 100

Consider n-step binomial model with 1-asset such that S(0) = 100, D = 0.95, R = 1.04 and U = 1.08. Let K = 100 be the strike price of a European call option with expiration time n. Compute its initial price C(0) for:

(a) n = 1

(b) n = 2

(d) n = 10

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