Consider a one step binomial tree on stock with a current price of $100 that can go either up to $115 or down to $85 in 1 year The stock does not pay dividend and interest rates are zero Compute the payoff of a 1 year $100 strike European put option on the stock if the stock price ends down at the $85 node of the tree in 1 year Consider a one step binomial tree on stock with a current price of $100 that can go either up to $115 or down to $85 in 1 year The stock does not pay dividend and interest rates are zero Compute the payoff of a 1 year $100 strike European put option on the stock if the stock price ends down at the $85 node of the tree in 1 year

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Question: Consider a one-step binomial tree on stock with a current price of $100 that can go either up to $115 or down to $85 in

Consider a one-step binomial tree on stock with a current price of $100 that can go either up to $115 or down to $85 in 1 year. The stock does not pay dividend and interest rates are zero. Compute the payoff of a 1-year $100-strike European put option on the stock if the stock price ends down at the $85 node of the tree in 1 year.

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