Consider a European put option on a stock, with a $64 strike and 1-year to expiration. The stock has a continuous dividend yield of 4%, and its current price is $23. Suppose the volatility of the stock is 13%. The continuously compounded risk-free interest rate is 8%. Use a one-period binomial tree to calculate the following: (a) The payoff for up movement. (b) The payoff for down movement. (c) The corresponding replicating portfolio: The number of shares. (d) The corresponding replicating portfolio: The lent/borrowed amount. (e) The option premium. (A) 35.74 (B) 37.74 (C) 34.74 (D) 38.74 (E) 36.74 em #3(a): Select v 1 Part (a) choices. (A) 41.98 (B) 43.98 (C) 42.98 (D) 40.98 (E) 44.98 em #3(b): Select v Part (b) choices. (A) 0.04 (B)-1.96 (C) 1.04 (D) -0.96 (E) -2.96 em #3(c): Select v 1 Part (C) choices. (A) 58.08 (B) 60.08 (C) 62.08 (D) 61.08 (E) 59.08 em #3(d): Select v Part (d) choices. (A) 38.98 (B) 39.98 (C) 37.98 (D) 36.98 (E) 35.98 em #3(e): Select v 1 Part (e) choices. Consider a European put option on a stock, with a $64 strike and 1-year to expiration. The stock has a continuous dividend yield of 4%, and its current price is $23. Suppose the volatility of the stock is 13%. The continuously compounded risk-free interest rate is 8%. Use a one-period binomial tree to calculate the following: (a) The payoff for up movement. (b) The payoff for down movement. (c) The corresponding replicating portfolio: The number of shares. (d) The corresponding replicating portfolio: The lent/borrowed amount. (e) The option premium. (A) 35.74 (B) 37.74 (C) 34.74 (D) 38.74 (E) 36.74 em #3(a): Select v 1 Part (a) choices. (A) 41.98 (B) 43.98 (C) 42.98 (D) 40.98 (E) 44.98 em #3(b): Select v Part (b) choices. (A) 0.04 (B)-1.96 (C) 1.04 (D) -0.96 (E) -2.96 em #3(c): Select v 1 Part (C) choices. (A) 58.08 (B) 60.08 (C) 62.08 (D) 61.08 (E) 59.08 em #3(d): Select v Part (d) choices. (A) 38.98 (B) 39.98 (C) 37.98 (D) 36.98 (E) 35.98 em #3(e): Select v 1 Part (e) choices