I am trying to wrap my head around the binomial model. In particular, how would the calculation go for deriving the price of a call option for one of the stocks expiring at time 2? You can pick any K.
I am usually used to just one stock, so this has me a bit confused.
(Each cell is a price, the arrows indicate change of time into new states, and the upper cell contains prices of stock 1, and lower cell prices of stock 2. No risk-free asset, no dividends).