Question: Please provide a step by step process of how to solve You are evaluating a call option on F with a strike price of $480.

Please provide a step by step process of how to solve

You are evaluating a call option on F with a strike price of $480. If F is able to develop a new technology, the price per share will go up to $759. Otherwise, the price will go down to $332. Let's assume that these are the only two possible scenarios. F shares today are trading at $475. You know that the risk-free rate is 5%. What is the price of this call option? Please round your answer to the nearest three decimals (i.e. 5.414). Please do not type the $ symbol. 4.687

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