Question: Question #3: Option Valuation (Multi-State Approach) [40 Points] Below is a two-period price tree for a share of stock in Microchip Technology (MCHP). Today In

Question #3: Option Valuation (Multi-State Approach) [40 Points] Below is a

Question #3: Option Valuation (Multi-State Approach) [40 Points] Below is a two-period price tree for a share of stock in Microchip Technology (MCHP). Today In 6 Months In 1 Year $79.35 S69 $60 S60.03 S52.20 $45.41 Using the binomial model, calculate the value today of a call option on MCHP stock with a strike price of $60. You may assume that the 6-month risk-free rate is 3.2%

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