Question: Please do it by hand, if not excel will suffice as well ->Construct a 2 period model for a call with the following info: S
Please do it by hand, if not excel will suffice as well
->Construct a 2 period model for a call with the following info:
S0 = $51, X= $50, the stock will either go up by 3.5% or down by 1% in each period. The risk free rate of return per period is 0.50%. Assume expiration of the call is at the end of the 2nd period. Calculate the value of a call at each point on the tree--6 total valuations!
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