Question: Let S = $45, r = 7% (continuously compounded), d = 1%, s = 25%, T = 2. In this situation, the appropriate values of

Let S = $45, r = 7% (continuously compounded), d = 1%, s = 25%, T = 2. In this situation, the appropriate values of u and d are 1.36343 and 0.82696, respectively. Using a 2-step binomial tree, calculate the value of a $50-strike European put option.

	a.	$5.666
	b.	$6.702
	c.	$5.227
	d.	$5.282
	e.	$6.076

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