Subject = Quantitative Finance

For an American call option on a stock, you are given: (i) The stock's price is 52 (ii) The stock's continuous dividend rate is 10% (iii) The option expires in 6 months (iv) The strike price is 53 The continuously compounded risk-free interest rate is 3%. The option is modeled with a 2-period binomial tree in which u = 1.3, d = 0.8. Determine the call premium. Select one: A. 6.33476 B. 7.99067 OC. 3.45443 OD. 4.55787 E. 5.54027 > For an American call option on a stock, you are given: (i) The stock's price is 52 (ii) The stock's continuous dividend rate is 10% (iii) The option expires in 6 months (iv) The strike price is 53 The continuously compounded risk-free interest rate is 3%. The option is modeled with a 2-period binomial tree in which u = 1.3, d = 0.8. Determine the call premium. Select one: A. 6.33476 B. 7.99067 OC. 3.45443 OD. 4.55787 E. 5.54027 >