1) AKX stock is currently trading at $50 today and in one period will either be worth 20% more or 20% less. The risk-free rate is 4%. What is the value of an at the money call option?
The value in one period could be either 50X1.2 = 60 of 50X0.8 = ...
The solution explains how to calculate the value of a at the money call option