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7. A stock price is currently 10 BDT. Over each of three months it is expected to go up by 20% or down by 20%

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7. A stock price is currently 10 BDT. Over each of three months it is expected to go up by 20% or down by 20% and the risk-free interest rate is 5% per annum with continuous compounding. (a) What is the value of nine-month European put option with a strike price of 12 BDT? (b) What is the value of nine-month American put option with a strike price of 12 BDT

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