b A stock is currently selling for #60. The call option on the stock exercisable a year from now at an exercise price of #55 is currently selling for #15. The risk-free interest rate is 12%. The stock can either rise or fall atter a year. Calculate the per cent of the stock rise Calculate the per cent of the stock fall

Right Benny’s, let's go. This problem can be solved using the one-period binomial option pricing model. We are given the current stock price (S_0), exercise price (K), time to expiration (T), current call option price (C_0), and the risk-free interest rate (r). We need to find the percentage rise and fall of the stock. Given values: Current stock price, S_0 = \#60 Exercise price, K = \#55 Time to expiration, T = 1 year Current call option price, C_0 = \#15 Risk-free interest rate, $r = 12\% =