Question: Need help with (C). 3. Consider the following binomial (non-recombining) tree for the price of an asset over a period of one year (every period

Need help with (C). 3. Consider the following binomial (non-recombining) tree for Need help with (C).

3. Consider the following binomial (non-recombining) tree for the price of an asset over a period of one year (every period is 6 months): 50 44 42 40 36 35 30 The annual interest rate throughout the year is 7% and the asset pays continuous dividends at 3% annually. (a) What is the risk neutral probability of the up move from the initial node ? (4 points) (b) What is the risk neutral probability of the up move from the node where the price is 44 ? (4 points) (c) What is the risk neutral probability of the down move from the node where the price is 35 ? (4 points)

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