Question: Please show all work thank you! (1 point) For all problems in this section, use the binomial tree model. Unless otherwise stated, assume no arbitrage.

Please show all work thank you! (1 point) For all problems

Please show all work thank you!

(1 point) For all problems in this section, use the binomial tree model. Unless otherwise stated, assume no arbitrage. A stock is currently priced at $45.00. The risk free rate is 4.7% per annum with continuous compounding. In 5 months, its price will be $50.85 with probability 0.58 or $39.15 with probability 0.42. Using the binomial tree model, compute the present value of your expected profit if you buy a 5 month European call with strike price $47.00. Recall that profit can be negative

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