Q17. A European call with strike $20 expires in one month. The underlying asset of this call has current value $22. The yearly volatility is 30% and the current interest rate is 4% pa.

For a two-step binomial model what is the returnover one time step correct to four significant figures?

Q19. I have to make a payment of $3000 in two months. The current monthly return on an investment is=1.2. What is the payment worth to me today? Give your answer to the nearest dollar, and do not include the dollar sign ($) in your answer.

Answer rating: 100% (QA)

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