Question: Only accept hand-written answer in pdf file format. Keep at least 4 decimals in all calculations. T.K stock price is 5241. It will either increase

Only accept hand-written answer in pdf file format. Keep at least 4 decimals in all calculations. T.K stock price is 5241. It will either increase or decrease 1196 in month 1 and 159, in month 2. The monthly risk-free interest rate is 5.696,.

A. Using the risk-neutral probability approach. find the premium of a 2-month put option with strike price of $240.

B. Using the replicating portfolio approach. find the premium of a 1-month call option with strike price of $241.

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