1.Calculate the risk-neutral probability of an up move.

2.A 6-month European put option has a strike price of $32. Calculate the value of the European option.

3.A 6-month American put option has the same strike price of $32. Calculate the value of the American put option.

Round the answers up to 4 decimal places. A stock's price is currently $30. Over each of the next two three-month periods it is expected to go up by 10% or down by 10%. The price of the stock in each node is presented in the binominal tree diagram below. The risk-free interest rate is 8% per annum (with continuous compounding). A $20