higher, lower or correctly

The following twostep binomial tree depicts the yearly price path of an underlying share. The length of each time step is one year and the risk free rate is ?% pa continuouslyr compounded. Eastpac Bank has offered to sell twoyear European call options on this share at a prioe of $12.12 with a strike price of $43. To determine whether to purchase these options at that price. you have decided to use the binomial tree to calculate the option value and compare this with the price offered. according to your calculations, the option offered by Eastpac Bank is priced v under the binomial pricing model you have used. Binomial Share Prices a) $5o.oo b) $57.50 o} $42.50 :1) $66.13 e) $48.88 f} $36.13 D} d)