Question: Let S = $100, K = $95, r = 8%, T = 0.5, and 8 = 0. Let u = 1.3, d =0.8, and n

Let S = $100, K = $95, r = 8%, T = 0.5, and 8 = 0. Let u = 1.3, d =0.8, and n = 1. 1. (10 pts) Find the price of a European put. 2. (10 pts) Suppose you observe a put price of $8. How to construct an arbitrage strategy

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