A Stock with a Current Price of $18 Will Either

Multiple Choice

A stock with a current price of $18 will either move up by a factor of 1.2 or down by a factor of .9 each period over the next two periods.The risk-free rate of interest is 4.5 percent.What is the current value of a call option with a strike price of $20?

A) $1.02
B) $1.08
C) $1.17
D) $1.21
E) $1.27