Rockford stock is trading at $20/share and can either increase to $26 or decrease to $18 over the course of one year. In a one-period binomial option model, given an interest rate of 5%, what is the price of an at-the money call on Rockford stock expiring in one year? (Use annual compounding.) Multiple Choice

$2.14

$2.88

$3.00

$2.50