Question: The question is provided as below Q1. Binomial option pricing (Past exam question} Suppose Grail's share price is currently 550. In the next six months

The question is provided as below

Q1. Binomial option pricing (Past exam question} Suppose Grail's share price is currently 550. In the next six months it will either fall to $40 or rise to $60. The six-month risk-free interest rate is 2% (6 month periodic rate). 3} Using the risk-neutral method, calculate the current value of a call option [on the share] with six-months to expiry and an exercise price of $50. b} Repeat the exercise using the replicating portfolio method

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