A stock is priced at $100.It pays a continuous dividend of 2% per year.The riskless rate is 3% per year continuously compounded. The volatility of the stock is 23% per year.

a) Construct a 2 period binomial lattice over a six month time horizon showing the stock prices. Identify the values for u, d and the risk neutral probability, p as well as the discount factor for each period.