Question: Please show all steps and formulas Consider a binomial model with up factor a. = 1 , and interest rate r = @- S'SIJI .

Please show all steps and formulas

Consider a binomial model with up factor a. = 1 , and interest rate \"r = @- S'SIJI . down factor d = i = E s In this case 33 = % and the stock price at time n is Sn 2 Snuff\" where ELI.\" is the symmetric random walk with ill-f0 = 0. (a) (b) (C) Consider the price ofa perpetual American put option with 5'0 2 10 and strike price K 2 1'2. Find the risk-neutral value of the put if the owner uses the exercise policy 1,,\" which we denote by Vlfml, for m, = 1,2. . . . In particular compute explicit values of VB\"), Vin\

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