Suppose a Stock Is Currently Trading for $23,and in One

Multiple Choice

Suppose a stock is currently trading for $23,and in one period it will either increase to $30 or decrease to $20.If the one-period risk-free rate is 5%,what is the price of a European call option that expires in one period and has an exercise price of $25?

A) $1.25
B) $1.98
C) $1.50
D) $2.21
E) $2.50