A stock is currently trading at $$100.$ An investor would like to

value two$-$year stock option using the binomial model. The

stock will either increase in value by $20\%$ or fall by $20\%.$ The

annual risk$-$free rate $=10\%.$

$$ Value a call option with a strike price of $$100$

$$ A$.$ $$8\mathrm{.}65$

$$ B$.$ $$14\mathrm{.}75$

$$ C$.$ $$18\mathrm{.}65$

$$ D$.$ $$20\mathrm{.}45$A stock is currently trading at $$100.$ An investor would like to

value two$-$year stock option using the binomial model. The

stock will either increase in value by $20\%$ or fall by $20\%.$ The

annual risk$-$free rate $=10\%.$

Value a call option with a strike price of $$100.$ Show work.

A$.$ $$8\mathrm{.}65$

$-$B$.$ $$14\mathrm{.}75$

$-$C$.$ $$18\mathrm{.}65$

D$.$ $$20\mathrm{.}45$