Question: Could you please give me some hints to solve the problem? Problem 6. A non-dividend paying stock currently sells for 40 and follows a single-

Could you please give me some hints to solve the problem?

Problem 6. A non-dividend paying stock currently sells for 40 and follows a single- period binomial model. One period from now, the stock will sell for either 70 or 20. A call Option written on this stock expires in one period, has a strike price of 50, and currently sells for 8. (1) What is the continuously compounded interest rate r for the period? (2) Compute A and B, the stock and bond positions that replicate the payoffs for the call option

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