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You are evaluating TSLA stock at a price of $325. It is rumored AAPL will potentially announce a buyout for TSLA in the next 3

You are evaluating TSLA stock at a price of $325. It is rumored AAPL will potentially announce a buyout for TSLA in the next 3 months. If they do, you believe the stock will rise to $422.50. If the rumor is not true you believe the stock will fall to $292.50.

If the annual risk free rate of interest is 8.24% (so the return on a risk free asset over the next 3 months will be 2%), using a one period binomial model what should the price of a call be with a $350 strike price with 3 months to expiration?

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