Question: Let S = $65, r = 3% (continuously compounded), d = 5%, s = 30%, T = 2. In this situation, the appropriate values of

Let S = $65, r = 3% (continuously compounded), d = 5%, s = 30%, T = 2. In this situation, the appropriate values of u and d are 1.32313 and 0.72615, respectively. Using a 2-step binomial tree, calculate the value of a $55-strike European call option.

Selected Answer:	b. $13.868
Answers:	a. $14.519
	b. $13.868
	c. $14.291
	d. $14.416
	e. $13.458

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