Question: 2. Consider the single period binomial model. Suppose r = 0.02, u = 1.05, d = 0.9 and So = 50. Consider a put option

2. Consider the single period binomial model. Suppose r = 0.02,

2. Consider the single period binomial model. Suppose r = 0.02, u = 1.05, d = 0.9 and So = 50. Consider a put option on the stock with strike price K = 49. (a) Compute the equivalent martingale measure (qu, qd). (b) Find the no-arbitrage price of the claim at time 0. (c) Find the replicating portfolio

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