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Binomial tree Consider a six-month European put option on one stock. Suppose that the current stock price is 15, the strike price is 18.5, the

  1. Binomial tree Consider a six-month European put option on one stock. Suppose that the current stock price is 15, the strike price is 18.5, the continuously compounded risk-free rate is 2% per annum, and the volatility of the stock is 10% per annum. A) Value this option using a two-period binomial tree. B) Will the value of the option be different if it is an American option?

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