Chapter $21$:You are attempting to value a put option with an exercise price of $$108$ and one year to

expiration. The underlying stock pays no dividends, its current price is $$108,$ and you

believe it has a $50\%$ chance of increasing to $$130$ and a $50\%$ chance of decreasing to

$$86.$ The risk$-$free rate of interest is $10\%.$ Calculate the value of a put option with

exercise price $$108.$

Note: Do not round intermediate calculations. Round your answer to $2$ decimal

places.

Answer is complete but not entirely correct.

Value of a put option

$$5\mathrm{.}50$