What is the relationship to the price

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Reference no: EM131550920

St. Johns Inc. stock is currently selling for $25 and has a volatility of 25%. The 7-month risk-free rate is 3% with continuous compounding. Use a 7-step binomial tree to answer these questions.

a. Price a 7-month up-and-out call option with a strike of $26 and a barrier of $33

b. Price a 7-month up-and-in call option with a strike of $26 and a barrier of $33

c. Price a 7-month vanilla call option with a strike of $26

d. What is the relationship to the price of the three options?

Reference no: EM131550920

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