Using a three-period binomial tree, value a down-and-out call option. The parameters you are given are the
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Using a three-period binomial tree, value a down-and-out call option. The parameters you are given are the following: the initial stock price is $100, the strike price is $105, the barrier is $90, the risk-free rate per-period is 5%, the option maturity is three years, and the volatility of the stock is 40%. Use the CRR method to construct the binomial tree.
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