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Binomial Model The current price of a stock is $20. In 1 year, the price will be either $24 or $14. The annual risk-free rate

Binomial Model

The current price of a stock is $20. In 1 year, the price will be either $24 or $14. The annual risk-free rate is 3%. Find the price of a call option on the stock that has a strike price of $21 and that expires in 1 year. (Hint: Use daily compounding.) Assume a 365-day year. Do not round intermediate calculations. Round your answer to the nearest cent.

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