# Fight Finance

#### CoursesTagsRandomAllRecentScores

 Scores keithphw $6,011.61 Jade$1,815.80 Chu $789.98 royal ne...$750.00 Leehy $713.33 Visitor$650.00 JennyLI $625.61 Visitor$590.00 ZOE HY $560.00 Visitor$555.33 Visitor $550.00 Visitor$550.00 Visitor $540.00 Visitor$500.00 Yizhou $489.18 Visitor$480.00 Visitor $464.70 Jasper.sun$460.00 LWH $460.00 Visitor$460.00

A one year European-style call option has a strike price of $4. The option's underlying stock pays no dividends and currently trades at$5. The risk-free interest rate is 10% pa continuously compounded. Use a single step binomial tree to calculate the option price, assuming that the price could rise to $8 $(u = 1.6)$ or fall to$3.125 $(d = 1/1.6)$ in one year. The call option price now is:

A one year European-style put option has a strike price of $4. The option's underlying stock pays no dividends and currently trades at$5. The risk-free interest rate is 10% pa continuously compounded. Use a single step binomial tree to calculate the option price, assuming that the price could rise to $8 $(u = 1.6)$ or fall to$3.125 $(d = 1/1.6)$ in one year. The put option price now is: