P-C= 0 PV[X)-5 = 0.5922 24.4281 22,1034 20,0000 18,0967 16,3746 READ THIS FIRST * Your goal is to build a binomial option pricing calculator. * do not modify the yellow cells * formulas have been provided in comment boxes. Read each comment box carefully. OP means Option Payoff. * use the F2 key to trace cell references in formulas and feel free to use range names (F5 key) * calculate the option payoffs first (see boxes titled CALL and PUT and fill in the green cells.) * recall the three steps: find delta, find B, then find option value. Use the formulas provided. * calculate the deltas for nodes A and B (blue boxes) * caluclate B for nodes A and B (blue boxes) * calculate the option value for nodes A and B (blue boxes) * calculate the delta, B, and option value for node C * Spis the stock price in the value tree for that node. * for full points, the result in the bright red cell should read PARITY * you will be expected to do these calculations for a two-period binomial on the exam * use this calculator to check your practice work. Modify the gray cells in the value tree to match your problem * move this textbox out of the way to begin PUT 0.0000 Stephen Engst: Call -> max(0, S - X) Put -> max(0, X - S) Stephen Engst: A = (Ou - Od) / (Su - 5d) Stephen Engst: B = (OPu - A*Su) * PV1 or B = (OPd - A%Sd) * PV1 Stephen Engst