H V 5 P Assignment #5 Consider a stck which is currently selling for $50. Construct a two step binomial tree, 1-month and 2 months respectively for each of the two steps. The stock market volatility is 30 %, the rate of interest is $52 (i) Calculate the price of an American Put. (ii) Provide a graphical illustration to demonstrate how the put price and the put payoff change with respect to changes in the stock price. (50) (50) 4 6. 7 10 11 12 13 15 16 17 18 19 .. H V 5 P Assignment #5 Consider a stck which is currently selling for $50. Construct a two step binomial tree, 1-month and 2 months respectively for each of the two steps. The stock market volatility is 30 %, the rate of interest is $52 (i) Calculate the price of an American Put. (ii) Provide a graphical illustration to demonstrate how the put price and the put payoff change with respect to changes in the stock price. (50) (50) 4 6. 7 10 11 12 13 15 16 17 18 19