Question: Please help explaining this problem to me. Thank you in advance! 4. Consider the Exxon stock discussed in class, which can go up or down

Please help explaining this problem to me. Thank you in advance!

4. Consider the Exxon stock discussed in class, which can go up or down 20% per year and has an initial value of $82. The current annual risk free rate is 1%, compounded annually. You are offered a 5-year European "hybrid" option with strike price $80. This option can be declared, after exactly 3 years, by the purchaser, to be either a call or a put. Find the value of this "hybrid" option. Use binomial trees with annual periods to solve this value

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