a) The risk-free rate is 5%. The stock of MarkIt Corp. (MIC) currently is trading at $50. You predict the price will either move up to $70 or down to $40 in the next period. If the price moves to $70, you predict it will move to $85 or $60 in the second period. But if the price moves to $40, it will move to $60 or $30 in the second period. Based on the binomial model, what is the price for a European put option on MIC with K=$55?

	A.	$9.03
	B.	$8.24
	C.	$6.26
	D.	$7.91

b)Winter Vine (WV) stock will not pay a dividend until three years from now, and the first dividend is expected to be $2 per share. You predict that the dividend payout ratio is 40% and WV's ROE is 15%. If WVs market capitalization rate is 12%, what is its intrinsic value today?

	A.	$33.31
	B.	$53.15
	C.	$27.02
	D.	$67.20