What is the value of a one-month european call option, Finance Basics

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What is the value of a one-month european call option

Problem

A stock price is currently $50. It is known that it will be either $55 or $45 at the end of one month. The risk-free interest rate is 10% per annum with continuous compounding. Using the binomial tree model, what is the value of a one-month European call option with a strike price of $48?

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Finance Basics: What is the value of a one-month european call option

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