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Assume that a stock price is currently at S = $60. It is known that in one year stock price will be either $70 or

Assume that a stock price is currently at S = $60. It is known that in one year stock price will be either $70 or $50. The annual interest rate is rf = 5%.

Using a one-period binomial tree model, what is the fair price of a European put option with strike price X = 55 and 1 year to maturity? Please include two digits after the decimal point in your answer.

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