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The current price of Natasha Corporation stock is $ 6.22. In each of the next two years, this stock price can either go up by
The current price of Natasha Corporation stock is $ 6.22. In each of the next two years, this stock price can either go up by $ 2.50 or go down by $ 2.00. The stock pays no dividends. The one-year risk-free interest rate is 3.9 % and will remain constant. Using the Binomial Model, calculate the price of a two-year call option on Natasha stock with a strike price of $ 7.00. What is the price of the two-year call option?
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