Question: Please solve. Please explain your reasoning. Please show your work. The current price of a non-dividend-paying stock is $50. Use a two-step binomial tree to

Please solve.

Please explain your reasoning.

Please show your work.

The current price of a non-dividend-paying stock is $50. Use a two-step binomial tree to value an AMERICAN put option on the stock with a strike price of $48. The option expires in 12 months. Each time step is 6 months, the risk-free rate is 5% per annum, u = 1.152, and d = 0.868. Calculate the option price. USE A BINOMIAL TREE AS IN THE CLASS NOTES. PLEASE SHOW ALL OF YOUR WORK. Please round your values to two decimal places

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