Question: Let S ( 0 ) = 1 2 0 , u = 1 . 2 , d = 0 . 9 and r = 1

Let S(0)=120, u =1.2, d =0.9 and r =1%. Consider a European
call option with strike price k =120 and T =2. Find the option price
and the replicating strategy.

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