B c D F G . K 184 Question 9 (10 points) Consider the following binomial option pricing problem. This option has two periods to go before expiring. Its stock price is $80 and its exercise price is $75. The risk-free rate is 4%, the value of u is 1.15 and the value of the dis 0.7. The stock pays dividend at the end of the first period at the rate of 2%. Construct the 2-period Binomial Option Tree model and find the value of both the call and put premiums 185 186 187 188 189 190 191 192 193 194 195 196 ANSWERS 197 Call Premium = 198 Put Premium = 199 200