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at position 7 The current price of a non-dividend paying stock is $35. Use a...

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Finance

at position 7 The current price of a non-dividend paying stock is $35. Use a one-step Binomial model to value a European at-the-money call option on the stock that expires in 12 months with u = 1.1 and d = 1/u. The risk-free rate is 5% p.a. Use discrete compounding method: Estimate the stock prices and calculate the options value at expiration. Calculate the value of the call option. Suppose a trader sells 1,000 options (10 contracts). How many stocks are necessary to buy or sell to hedge the traders position at the time of the trade practically

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