Question: Suppose the exchange rate is $ 1 . 2 9 / . Let r$ = 6 % , r = 7 % , u =

Suppose the exchange rate is $1.29/. Let r$ =6%, r=7%, u =1.3, d =0.8, and T =2. Using a 2-step binomial tree, calculate the value of a $1.35-strike European put option on the British pound. The answer is $0.1822. Please show steps to solve.

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