5. question

this price is equally likely to go up by 11% or down continuously compounded annual risk-free rate is 20% per year a three-step binomial tree that shows possible price paths and compute the can put with a slnke price of S75 and nine months until expiration written on this asset. the maximum diate calculations. set is 5. A European put option written on a stock that currently trades for So = 1:50 has a strike price of K=151 and 2 months unul expiration. The annualized standard deviation of the underlying stock retums is expected to be 34% per year and the continuously compounded annual risk-free rute is 20% per year across all maturitics. Compute the theoretical price of this European put option using the Black-Scholes option pricing model