Question: Binomial Option Pricing Case 1: A stock is currently priced at $39/share and pays no dividends. The periodic risk-free rate of interest is 2%. The

Binomial Option Pricing Case 1: A stock is currently priced at $39/share and pays no dividends. The periodic risk-free rate of interest is 2%. The up factor of 1.25 and a down factor of 0.8. Binomial Option Pricing Case 1: In a one-period binomial tree option pricing model, if the chance for the underlying stock price to go down has increased to 95% from 45%, then the theoretical price of a European put option with a strike price of 36 will:

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