Problem #8: Consider a European call option on a stock, with a $48 strike and 1-year to expiration. The stock has a continuous [6 marks] dividend yield of 8%, and its current price is $69. Suppose the volatility of the stock is 25%. The continuously compounded risk-free interest rate is 5%. Use a two-period Cox-Ross-Rubinstein tree to calculate the following: (a) The payoff at time 2: Up movement. (6) The payoff at time 2: Middle movement. (C) The payoff at time 2: Down movement. (d) The payoff at time 1: Up movement. (2) The payoff at time 1: Down movement. (f) The option cost at time 0. Problem #8: Consider a European call option on a stock, with a $48 strike and 1-year to expiration. The stock has a continuous [6 marks] dividend yield of 8%, and its current price is $69. Suppose the volatility of the stock is 25%. The continuously compounded risk-free interest rate is 5%. Use a two-period Cox-Ross-Rubinstein tree to calculate the following: (a) The payoff at time 2: Up movement. (6) The payoff at time 2: Middle movement. (C) The payoff at time 2: Down movement. (d) The payoff at time 1: Up movement. (2) The payoff at time 1: Down movement. (f) The option cost at time 0