Question: Now construct a binomial tree, with minimum n = 5 steps, to model the future evolution of the stock prices up to the expiration date

Now construct a binomial tree, with minimum n = 5 steps, to model the future evolution of the stock prices up to the expiration date of your option. Your up and down parameters are u = et and d = et , where t (in years) is the length of the time step on your tree. The recommended time step is one day (= 1/252) and n will be the number of days over the time period from today to maturity.

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