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You have an underlying asset worth 50 dollars that will either go up in value, u=e0.10,...

You have an underlying asset worth 50 dollars that will either go up in value, u=e0.10, or fall in value, d=e-0.15, in one period. You have a call option on this asset with a strike price of $52. Cu, which is the value of the call when the underlying asset price goes up, is $5 and Cd, which is the value of the call when the underlying asset price goes down, is -$7.5. (hint use Binomial model) A. TRUE B. FALSE

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Answer Cu=3.26 ; Cd=0

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