### Binomial Model: price a European call option with exercise price of $84.

1) Consider a stock currently selling for $80. It can go up or down by 15% per period. The risk-free rate is 6%. Use a one period binomial model. You want to price a European call option with exercise price of $84. a. Determine the two possible stock prices at expiration. b. Construct two portfolios with equivalent payoffs. On