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Suppose that Stock XYZ is currently trading at $25 and does not pay any dividends. Using a binomial tree with two periods, we would like

Suppose that Stock XYZ is currently trading at $25 and does not pay any dividends. Using a binomial tree with two periods, we would like to price an American call option written on this stock with a strike price of $25 and expiration date in one month. Assume that annual continuously compounded interest rate is 1% and the volatility of the stock is 40% per year. If the figure below shows the call prices according to the binomial tree, what is the value of Cu? Cuu Cu Cud Cd Cdd 0 4.4347 2.1373 O 2.7123

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