12-10

You are attempting to value a put option with an exercise price of $107 and one year to explration. The underlying stock pays no dividends, Its current price is $107, and you belleve It has a 50% chance of Increasing to $125 and a 50% chance of decreasing to $89. The risk-free rate of Interest is 5%. Calculate the value of a put option with exercise price \$107. (Do not round Intermedlate calculatlons. Round your answer to 2 decimal places.) Answer is complete but not entirely correct