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You are attempting to value a call option with an exercise price of $100 and...

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You are attempting to value a call option with an exercise price of $100 and one year to expiration. The underlying stock pays no dividends, its current price is $100, and you believe it has a 50% chance of increasing to $120 and a 50% chance of decreasing to $80. The risk-free rate of interest is 10%. a. What will be the payoff to the call, Cu, if the stock goes up? Payoff b. What will be the payoff, Cd, if the stock price falls? Payoff c. Calculate the risk-neutral probability. (Do not round intermediate calculations. Round your answer to 2 decimal places.) d. Find the value of the option. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Call value

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