Question: Price a call using the two-period binomial model assuming the following data: S 0 = 129, K=80, U=1.5, D=0.5 and R=1.1. If the call option

Price a call using the two-period binomial model assuming the following data: S₀ = 129, K=80, U=1.5, D=0.5 and R=1.1. If the call option were priced at $55 in the market, what would an arbitrager do?

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