Question: Consider the below information: Two period, two state world. Let the current stock price be 90 The risk-free rate be 8%. Each period the stock

Consider the below information: Two period, two state world. Let the current stock price be 90 The risk-free rate be 8%. Each period the stock price can go either up by 10% or down by 8%. A call option expiring at the end of the second period has an exercise price of 85. Requirements: 1. Determine the possible prices of the call at the end of the first period (C. and Ca) 2. What is the current price of the call [C]

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