C = AS(1+r U) + C(up) or C = (1 + r) AS(1+r D) + C(down) (1 + r) An asset has a current spot price of $1000. This asset can increase in value by 5% or decrease in value by 5%. How much should an ATM call sell for if the current discount rate is 5%? C = AS(1+r U) + C(up) or C = (1 + r) AS(1+r D) + C(down) (1 + r) An asset has a current spot price of $1000. This asset can increase in value by 5% or decrease in value by 5%. How much should an ATM call sell for if the current discount rate is 5%