1. The current price of Estelle Corporation stock is $ 20.00. In each of the next two years, this stock price will either go up by 23% or go down by 23 % The stock pays no dividends. The one-year risk-free interest rate is 6.9% and will remain constant. Using the Binomial Model, calculate the price of a one-year put option on Estelle stock with a strike price of $20.00.

The price of the one-year put option is= (Round to the nearest cent).

2. Roslin Robotics stock has a volatility of 24% and a current stock price of $54 per share. Roslin pays no dividends. The risk-free interest is 4 % Determine the Black-Scholes value of a one-year, at-the-money call option on Roslin stock.

The Black-Scholes value of a one-year, at-the-money call option on Roslin stock is ___________ (Round to the nearest cent.)

3. Eagletron's current stock price is $ 10 Suppose that over the current year, the stock price will either increase by 95 % or decrease by 54 % Also, the risk-free rate is 25 % (EAR).

a. What is the value today of a one-year at-the-money European put option on Eagletron stock?

b. What is the value today of a one-year European put option on Eagletron stock with a strike price of $19.50?

c. Suppose the put options in parts (a) and (b) could either be exercised immediately, or in one year. What would their values be in this case?