3) A stock price is $100 now. In 1 month it can go 5% up or down. In the second month itcan go 5% up or down. And in the third month it can go 5% up or down. Construct a

binomial tree for this stock. The annual interest rate is 10% with continuouscompounding. Use risk-free portfolios to calculate the value of a three- month Europeanput with the strike price 101. Calculate the Delta at each node of the tree. Calculate theput value at each node of the tree.