113 You want to value a call option with a strike price of $165.00 and one year to expiration. 114 The underlying stock pays no dividends. Every six months, the stock price either 115 increases by a factor of 1.50 or decreases by a factor of 0.50. The current stock price is $130.00 116 The risk-free rate is 2.50% per six-month period. Draw a two-period binomial tree 117 and answer the following questions. 118 119 a. What is the value of the call option at the up node (Cu)? 120 121 Cu (to nearest cent) 122 123 b. What is the value of the call option at the down node (Cd)? 124 125 Cd (to nearest cent) 126 127 c. What is the value of the call option today? 128 129 C(to nearest cent) 130