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Assume the riskless rate is 3 . 8 % . A stock sells for $ 8 5 , and in one year it will either

Assume the riskless rate is 3.8%. A stock sells for $85, and in one year it will either in value to $100 or fall in value to $70.
a.(7 points) Find the value of a $85 call using the binomial model.
b.(6 points) Calculate the value of the call using risk neutral valuation.
c.(10 points) Calculate the value of a $85 put using both the binomial model and put-call parity.
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