You buy a call on Pfizer (PFE) with a strike price of $37. Pfizer's current price is $37.82, has a u of 1.05, and a d of 0.95. The risk free rate is 1% per period. Use a one period binomial model. If Pfizer's price goes up, what is your holding period return?
ANSWER IN THE IMAGE ((YELLOW HIGHLIGHTED). FEEL FREE TO ASK ANY DOUBTS. THUMBS UP PLEASE.
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