s Back to Assignment Attempts Do No Harm: /5 4. Option pricing - Multiperiod binomial approach Aa Aa E The value of an option can be calculated by using sophisticated formulas that can be easily created through a spreadsheet. In the real world, two possible outcomes for a stock price in six months is an assumption. The stock markets are volatile, and stocks move up and down based on market- and firm-specific factors. a step-by-step approach in the case of single periods or by using Use the following formula to calculate the value of any call option within the same time period. To use the formula for different call options, you can solve this formula with algebra or program it into a spreadsheet. Cuft1 + (er/ 365)365/)-dl Cofu-(1+CR /365)s6s/u/m)1y u-d 1+ (RF365)1365/() Based on your understanding of the binomial option pricing model, is the following statement true or false? n, and sometimes called primitive securities, represent variables that impact the value of an option but depend on the stock process factors u and d, the risk-free rate, time until expiration, and the number of periods until expiration. O True O False