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he risk-free rate is 8% per annum with continuous compounding. The price of stock CPU is $30. CPU currently does not pay a dividend. You

he risk-free rate is 8% per annum with continuous compounding. The price of stock CPU is $30. CPU currently does not pay a dividend. You use a two-step tree to price a European call on CPU with a strike price of $32. The option expires in six months. If you estimate that u=1.1 and d=0.9, what is the price of your call?

A.$2.56 B.$1.49 C.$2.25 D.$1.88

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