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1. Assume a two-step binomial model. A stock is currently selling at $80. The stock can go up by 25% or down by 20% in

1. Assume a two-step binomial model. A stock is currently selling at $80. The stock can go up by 25% or down by 20% in each time step. The riskless rate is 10%.

A. What is the price of a call option with a strike of 90?

B. What is the price of a put option with a strike of 90?

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