Question: Problem 2.2. A stock that does not pay any dividend is currently priced at $54. After one period, the stock price will increase to $80

Problem 2.2. A stock that does not pay any dividend is currently priced at $54. After one period, the stock price will increase to $80 or decrease to $40. A bond that will pay $100 after one period is trading at $96. Find the risk-neutral probabilities of stock price up and down movements. Value a call option with strike $50. Value an at-the-money European put option.

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