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Assume today the price of a stock is $40, and in one year the price can be either $50 or $32. A call option is

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Assume today the price of a stock is $40, and in one year the price can be either $50 or $32. A call option is sold on this stock with 1-year maturity and a $40 strike. The risk-free rate is 10%. Which of the following is true if the option premium is $5? The option is underpriced. There is not enough information to price the option. The option is overpriced. The option is properly priced

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