Question: Future stock prices are modeled with a 1-period binomial tree based on forward prices, the period being 6 months. You are given: (i) The stock's

Future stock prices are modeled with a 1-period binomial tree based

Future stock prices are modeled with a 1-period binomial tree based on forward prices, the period being 6 months. You are given: (i) The stock's current price is 40 . (ii) u=1.3 (iii) The continuously compounded risk-free interest rate is 4%. (iv) The stock pays dividends at a continuous rate of 2%. Determine

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