Question: using excel a) Consider a two-period binomial model in which a stock currently trades at price of $ 65. The stock price can go up

using excel

a) Consider a two-period binomial model in which a stock currently trades at price of $ 65. The stock price can go up 20% or down 17% each period. The risk free rate is 5%. Calculate the price of a call and put options expiring in two periods with an exercise price of $60.

b) Let St=30, be the price of the underlying price. A European option expires at T=1/2. The exercise price is 28. The continuous compounded risk free rate is 10%. The volatility is 0.4. Use the Black Scholes model to determine the price of the call and put options

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