Question: Consider the binomial option pricing model. A stock is currently priced at $120 and 53 days from now the price will be either $134 or

Consider the binomial option pricing model. A stock is currently priced at $120 and 53 days from now the price will be either $134 or $98. The risk-free rate is 1.75%Based on your results for the previous questions, describe the form of a partially covered call position as it relates to option pricing models. What role does this replicating portfolio play in the logic of arbitrage pricing for the call option? (HINT: This question is asking you to explain the logic of the BOPM as it relates to the equilibrium price of a call option.)

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