Question: 1 . Use the binomial option pricing model with monthly intervals and the put call parity relationship to find the call and put prices of

1.Use the binomial option pricing model with monthly intervals and the put call parity relationship to find the call and put prices of non-dividend paying European stock options with a maturity of 2 months. The current market price of the stock is 40 dollar and the price has an equal likellhood of going up or coming down. The exercise price of the stock option is 50 dollar.Analysts have ascertained the amount of upward stock price movement to
be 20% and the amount of downward movement to be 30%. The prevailing risk-free interest raleis 12%

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