Question: Let S = $45, K = $55, r = 5% (continuously compounded), T = 0.25, and d = 0. Let u = 1.25, d =

Let S = $45, K = $55, r = 5% (continuously compounded), T = 0.25, and d = 0. Let u = 1.25, d = 0.7, and n = 1. Calculate the value of a European call if D = 0.050505 and B = 1.5711.

	a.	$0.540
	b.	$0.702
	c.	$0.596
	d.	$0.800
	e.	$0.519

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