Compute the fair value of a chooser option which expires after n = 10n=10 periods. At expiration the owner of the chooser gets to choose (at no cost) a European call option or a European put option. The call and put each have strike K = 100K=100 and they mature 5 periods later, i.e. at n = 15n=15

Instructions: Quiz Instructions: Option Pricing in the Multi-Period Binomial Questions 1-8 should be answered by building a 15-period binomial model whose parameters should be calibrated to a Black-Scholes geometric Brownian motion model with: T = .25T=.25 years, S_{0} = 100S 0 =100, r = 2\%r=2%, \sigma = 30\%=30% and a dividend yield of c = 1\%.c=1%. Hint Your binomial model should use a value of u = 1.0395...u=1.0395.... (This has been rounded to four decimal places but you should not do any rounding in your spreadsheet calculations.) Submission Guidelines Round all your answers to 2 decimal places. So if you compute a price of 12.9876 you should submit an answer of 12.99.