Question: A B C D E F G H I J K '84 uestion 9 1|) int: Consider the following binomial option pricing problem. This option

A B C D E F G H I J K

A B C D E F G H I J K '84 uestion 9 1|) int: Consider the following binomial option pricing problem. This option has two periods to go before expiring. Its stock price is $80 and its exercise price is $75. The riskfree rate is 4%, the value of u is 1.15 and the value of the d is 0.7. The stock pays dividend at the end of the first period at the rate of 2%. Construct the 2-period Binomial Option Tree model and find the value of both the call and put premiums 185 186 18? 188 189 190 191 192 193 194 195 '95 ANSWERS 1'\" Call Premium= 198 Put Premium = 199 200

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