Question: (Binomial Option pricing) Consider a two-period binomial model in which a stock trades currently at $44. The stock price can go up 6% or down

(Binomial Option pricing)

Consider a two-period binomial model in which a stock trades currently at $44. The stock price can go up 6% or down 6% each period. The risk free rate is 2% per period.

A) Calculate the price of a call option expiring in two periods with an exerciseprice of $45.

B) Calculate the price of a put option expiring in two periods with an exerciseprice of $45.

Please show all calculations in Excel.

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