Question: Let S = $50, K = $60, r = 7% (continuously compounded), d = 4%, s = 35%, and T = 2. What are the

Let S = $50, K = $60, r = 7% (continuously compounded), d = 4%, s = 35%, and T = 2. What are the appropriate values of u and d to build a 5-period binomial stock price tree? (Use the formulas from the main part of the chapter and lecture notes, not the alternative formulas in the appendix.)

Please do not answer using excel. Correct answer was u = 1.2628 and d = .8111

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