Question: Please answer a, b and c! use a binomial tree to price it. thanks!! A stock price is currently $50. Over each of the next

Please answer a, b and c! use a binomial tree to

Please answer a, b and c! use a binomial tree to price it. thanks!!

A stock price is currently $50. Over each of the next two three-month periods it is expected to go up by 6% or down by 5%. The risk free interest rate is 5% per annum with continuous compounding. a) What is the value of a six-month European put option with a strike price of $51? b) What is delta of this option? c) If the put option was American would it ever be optimal to exercise it early at any of the nodes of the tree? Explain. [Use Binomial tree to price this option.]

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