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1. Suppose AT&T's current stock price is $100 and it is expected to either rise to 130 or fall to 80 by next April

1. Suppose AT&T's current stock price is $100 and it is expected to either rise to 130 or fall to 80 by next April (assume 6-months from today). Also assume you can borrow at the risk-free rate of 3% per 6 months. Using the binomial approach, what would you pay for a call option on AT&T that expires in 6-months and has a strike price of $105?

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