Question: The binomial pricing theory, the binomial pricing formula is obtained through technique of hedging in both long position and short position. The actual is taking

The binomial pricing theory, the binomial pricing formula is obtained through technique of hedging in both long position and short position. The actual is taking a long position in stock security and long position in call option. The literature also identified another wat that is combining risk free bonds and stock and then replicate call option. Based on the alternate way develop the single period option pricing model in which the European call option is replicated using the stock and a risk-free bond. Also show that there will be no effect on the option pricing formula of binomial setting.

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