Question: 6. Consider the following binomial tree. The interest rate is 0.2% per month. Now 1 Months Later 2 Months Later uSo=133.10 uSo 121.00 udSo 110.00

6. Consider the following binomial tree. The interest rate is 0.2% per month. Now 1 Months Later 2 Months Later uSo=133.10 uSo 121.00 udSo 110.00 So=110.00 dSo 100.00 dS90.91 (1) Use the tree to price a put option maturing in 1 month with strike price equal to 108 (2) If I sell one contract of this put option, what is my maximum profit and maximum loss? (3) Use the tree to price a call option maturing in 2 months with strike price equal to 103. 6. Consider the following binomial tree. The interest rate is 0.2% per month. Now 1 Months Later 2 Months Later uSo=133.10 uSo 121.00 udSo 110.00 So=110.00 dSo 100.00 dS90.91 (1) Use the tree to price a put option maturing in 1 month with strike price equal to 108 (2) If I sell one contract of this put option, what is my maximum profit and maximum loss? (3) Use the tree to price a call option maturing in 2 months with strike price equal to 103

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