Question: Use the binomial option pricing model to find the implied premium of a CALL option on Wendys. Wendys stock is currently trading at $22.43. Have

  1. Use the binomial option pricing model to find the implied premium of a CALL option on Wendys. Wendys stock is currently trading at $22.43. Have the model price at 10 day intervals for 3 nodes: 10 days, 20 days, and 30 days. The strike price is $25. The risk free rate is .5% and the volatility (standard deviation) of the stock is .40. Show the entire binomial tree.

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