Question: Consider a six-month put option on a stock with a strike price of $32. The current stock price is $30 and over the next six

Consider a six-month put option on a stock with a strike price of $32. The current stock price is $30 and over the next six months it is expected to rise to $36 or fall to $27. The risk-free rate is 6%.

a. What is the Put Price?

b. What is the Risk Neutral Probability P?

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