Use the Information for the Question(s)below

question 13

Essay

Use the information for the question(s)below.
The current price of KD Industries stock is $20.In the next year the stock price will either go up by 20% or go down by 20%.KD pays no dividends.The one-year risk-free rate is 5% and will remain constant.
-Construct a binomial tree detailing the option information and payoffs for a call option with a $20 strike price that expires in one year.

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