Question: For the following five questions, use the information below: Using the method of chapter 10 (,) create a 2-period (each period is 6 months) binomial

For the following five questions, use the information below:

Using the method of chapter 10 (,) create a 2-period (each period is 6 months) binomial model of stock prices.

How many possible stock prices are there after a year?

Answer value

How many possibleaverageprices are there after a year?

Answer value

What is the difference between the arithmetic average price if the stock goes up then down, and the arithmetic average price if the stock goes down then up?

Answer value

What is the price of an arithmetic average price call option?

Answer value

What is the price of a geometric average price call option

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