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5. TWO-PERIOD BinOMIAL MODEL (30 PTS) The current stock price for Company A is, S0=$30 per share. In two months, the stock price have 80%

5. TWO-PERIOD BinOMIAL MODEL (30 PTS) The current stock price for Company A is, S0=$30 per share. In two months, the stock price have 80% chance to go up with the factor 1.2 per month while it is 20% chance to drop by a factor 0.8 per month. The monthly risk free interest rate is 8%. What is the fair price for a European put option at strike K=$28 expiring in two months

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