A stock index currently stands at 300. It is expected to increase or decrease by 10% over each of the next two time periods of 3 months. The risk-free interest rate is 8% and the dividend yield on the index is 3%. What is the value of a 6-month put option on the index with a strike price of 300 if it is

(a) European and

(b) American?

AppendixLO1