1. A European call option on a non-dividend paying stock has a strike price of $100 and matures in one period. Currently, this stock has a share price of $100. Next period the stock can be $150 or $50 dollars per share. The one period risk-free rate is 2%. Investors price this option using the one period binomial model.

   Based on the binomial model, what is the initial value of the replicating portfolio composed of the stock and the bond? Your answer should be rounded to the nearest dollar ($200.49 would be rounded to $200 and $200.50 would be rounded to $201.)

   		$50
   		$53
   		$55
   		$62
   		None of the other answers are correct.