Question: Use a 2-step binomial tree to value a put option. All of the steps in your calculation should be shown including the calculation of P

Use a 2-step binomial tree to value a put option. All of the steps in your calculation should be shown including the calculation of P and the calculation of each of the option nodes U, D, UU, UD & DD.

Assume that at each node the stock moves up 20% or down 20%.

The option expires in 2 years.

The interest rate is 5% continuously compounded.

The spot price is 100 and the option strike price is 104.

Early Exercise is not possible with this option.

Please show workings and calculation clearly

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