A stock price is currently S40. It is known that at the end of three months it will be either $45 or $35. The risk-free rate of interest with quarterly compounding is 8% per annum. Calculate the value of a three-month European put option on the stock with an exercise price of $40. Verify that no-arbitrage arguments and risk neutral valuation arguments give the same answers. w a Question 5 (1 point) A stock price is currently $50. Over each of the next two three-month periods it is expected to go up by 10% or down by 10%. The risk-free interest rate is 8% per annum with continuous compounding. What is the value of a six-month American put option with a strike price of $52