The value of an option can be calculated by using a step-by-step approach in the case of single periods or by using sophisticated formulas that can be. easily created through a spreadsheet. In the real world, two possible outcomes for a stock price in six months is an assumption. The stock markets are volatile, and stocks move up and down based on market-and firm-specific factors. Use the following formula to calculate the value of any call option within the same time period. To use the formula for different call options, rou can solve this formula with algebra or program it into a spreadsheet. Evaluate the foliowing statement based on your understanding of the binomial option pricing model. w and d, sometimes called primitive secunties, represent varables that impact the value of an option but depend on the stock process factors u and d, the risk-free rate, time until expiration, and the number of periods until expiration. True False You have the following information about LearnMore Incis stock and a two-month call option wish a strike price of \$109.20, LearnMore Ine's current stock price is $84,00, You are using the multiperiod binomial option pricing model to find the value of the twa-month option with two periods. . and II. values given here apply to any period. You work wh a Junior analys to calculate the value of the option, and she submits her inferences to you. Which of the following points are true in the case of LearnMere the. s stock options? Check all that apply. The value of the one-monat call option wath a strike price of $109.20 at the end of one month will be $0.00. The value of the call option will always remain $0.00, irrespective of the time unti expiration. The option payolf if the stock goes up in one month will be 10.00 . LearnMore Ine's stock price sfter one month likely will be $95.62 if the stock goes up by a factor of 1.1383