Question: Please show all work LONGER PROBLEMS/ QUESTIONS: (continued) 2. (19 pts) Binomial OPM: Consider a binomial world in which the current stock price of $82

Please show all work

LONGER PROBLEMS/ QUESTIONS: (continued) 2. (19 pts) Binomial OPM: Consider a binomial world in which the current stock price of $82 can either go up by 24% or down by 18% per period. The risk-free rate is 6.0% per period. The stock pays no dividends. a. A call is written on the stock with an exercise price of $80. Assume a two-period world where the option expires at the end of the second period. The call is an American-style option. What is the value of the call, based on a 2-period binomial model? b. What is the correct price for a American-style put on this stock, but here with a exercise price of $96, based on a ONE-PERIOD binomial option-pricing model? (the time to maturity for the put is one-half the time to maturity for the above call in a.) Make sure and show your work for full credit. c. What if the above Put option was instead a European-style Put option; should its value be the same or different? If different, what should be the fair value of the European-style put

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