Question: Create a binomial tree for a stock. based on (with our usual notation): Length of period: in days: 180 in years: T = 0.493151 (using

Create a binomial tree for a stock. based on (with our usual notation): Length of period: in days: 180 in years: T = 0.493151 (using a 365 day year) Continuously compounded rate: r = 0.06 Initial stock price: 3(0) = 102 Volatility parameter: a = 0.3 The drift parameter: m = 0.04 Number of sub-peliods: n = 3 In the grey area, use at least six decimal places. Length of subinterval in years: h = Upfactor: u = Dowr'rfaotor: d = FV($1) per period: R{0.h} = R = Risk-neutralized up-probability: II: = We are given Texpiration European call and put with strike prioe K: 95 Complete the binomial tree for the stock and for the two options. For prices on the binomial trees, use at least 3 decimal places. Verify the putcall parity relationship for time prices. Show work. pl) =

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