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The following two securities are currently trading in the economy with two potential states of the future. Suppose that annualized risk-free rate is r, and

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The following two securities are currently trading in the economy with two potential states of the future. Suppose that annualized risk-free rate is r, and time to maturity is one-year. 2 0 B1 = = 0.90 B2 = 0.84 = 0 2 Suppose that there exists a call option on B1 with a strike price of 1.5 that matures in one-year. What is the price of the call option

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