Assume a One-Period World with Current Share Price of $5 $1.0565$

Multiple Choice

Assume a one-period world with current share price of $5.00,interest rate of 8% over the period and a price increase factor of 1.25.Given this information,the current premium on a call option with an exercise price of $4.50 using the binomial model is:

A) $1.0565$
B) $1.1131$
C) $1.1256$
D) $1,3042$