Question: Please solve. Please show your work. Please explain your reasoning. The current price of a non-dividend paying stock is $30. Use a two-step binomial tree

Please solve.

Please show your work.

Please explain your reasoning.

The current price of a non-dividend paying stock is $30. Use a two-step binomial tree to value European call option on the stock with a strike price of $32. The option expires in 6 months. Each time step is 3 months and the risk-free rate is 8% per annum. Calculate the option price when u = 1.1 and d = 0.9. USE A BINOMIAL TREE AS IN THE CLASS NOTES, PLEASE SHOW ALL OF YOUR WORK

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