Eagletron's current stock price is $10.

Suppose that over the current year, the stock price will either increase by 95%

or decrease by 45%.

Also, the risk-free rate is

25 %25%

(EAR).

a. What is the value today of a one-year at-the-money European put option on Eagletron stock?

b. What is the value today of a one-year European put option on Eagletron stock with a strike price of

$ 19.50$19.50?

c. Suppose the put options in parts

(a)

and

(b)

could either be exercised immediately, or in one year. What would their values be in this case?