Question: You are an options dealer. Given a binomial model for stock prices where So=$50, Su=$60, and Sd=$40, you sell call options with strike price $55

You are an options dealer. Given a binomial model for stock prices where So=$50, Su=$60, and Sd=$40, you sell call options with strike price $55 and expiration T=1/2 year. Suppose that the annual interest rate being compounded continuously is r = 5%. Assume that you sell 100 call options for the fair market price + $0.10. What is your profit, independent of the outcome of the stock price? Show that your profit is indeed independent of the outcome of the stock price.

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