Question: Take another look at our two-step binomial trees for Google, for example, in Figure. Use the replicating-portfolio or risk-neutral method to value six-month call and

Take another look at our two-step binomial trees for Google, for example, in Figure. Use the replicating-portfolio or risk-neutral method to value six-month call and put options with an exercise price of $400. Assume the Google stock price is$430.

S430.00 Now $350.85 $527.00 Month 3 Month 6 $286.27 $430.00 $645.90 ($0) ($215.90) (S0)

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