Question: 2. 2.1 Consider the binomial model with u = 1.25, d = 0.8, risk-free rate of 10% and initial asset price So = 100. Calculate

2. 2.1 Consider the binomial model with u = 1.25, d

2. 2.1 Consider the binomial model with u = 1.25, d = 0.8, risk-free rate of 10% and initial asset price So = 100. Calculate the price of an American put option with exercise price K = 100 and n = 4 periods of one year each left until expiry. TA 50/1 2. 2.1 Consider the binomial model with u = 1.25, d = 0.8, risk-free rate of 10% and initial asset price So = 100. Calculate the price of an American put option with exercise price K = 100 and n = 4 periods of one year each left until expiry. TA 50/1

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