Question: Let S = $55, r = 6% (continuously compounded), d = 1%, s = 25%, T = 2. In this situation, the appropriate values of

Let S = $55, r = 6% (continuously compounded), d = 1%, s = 25%, T = 2. In this situation, the appropriate values of u and d are 1.34986 and 0.81873, respectively. Using a 2-step binomial tree, calculate the value of a $65-strike American put option.

Selected Answer:	b. $11.163
Answers:	a. $10.328
	b. $11.163
	c. $9.726
	d. $10.966
	e. $11.493

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