Question: Use the two-state binomial call option model for this problem. S0= $100; X = $120; the two possibilities for ST are $150 and $80, the

Use the two-state binomial call option model for this problem. S0= $100; X = $120; the two possibilities for ST are $150 and $80, the risk-free rate is 5%. The value of the call option is _______.

Kindly, mention formula used and show working for all the steps, thank you!

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