Math 131 Binomial Option Pricing Model Homework Assignment A stock is currently selling for $50 per share. By years end, its value will either rise to $60 or fall to $41.67. A European call option on the arthe continuously compounded risk free rat of interest is 2%, what is the seling price of the option? b) If the currently selling price of the option is $4.56, what is the continuously compounded risk free interest stock has a strike price of $52 and expires in one year. rate? 2) A stock currently sells for $64 per share. Each quarter the stock value either goes up by a factor of u 1.1 selling price of the stock (i.e. $64) and expires in one year. The continuously compounded risk free interest rate or down by a factor of d- A European call option on the stock has a strike price equal to the current is 6%. Use a 4 penod binomial option pncing model to determine the current selling price of the option