For all of Part I, consider a financial market consisting of one risk-less asset with an interest rate of 4% per annum with continuous compounding and one risky asset with an estimated volatility of 25% per annum. Today's price of the risk-less and risky asset is 1 and 75, respectively (all prices quoted in SEK). There is a fixed terminal horizon T of 6 months and throughout K = 68. The word price refers to today's arbitrage-free price. Final answers should be given without decimals. 1 For this question, you should use a two-period Binomial model for the market described above; the parameters should be appropriately chosen so as to correspond to the characteristics of the market. C) Suppose in addition that the risky asset will pay a dividend of 3% (dis- cretely) of its current value every three months. Price the American put option given in b). Hint: Consider whether you would exercise the option just before or just after the dividend payment. For all of Part I, consider a financial market consisting of one risk-less asset with an interest rate of 4% per annum with continuous compounding and one risky asset with an estimated volatility of 25% per annum. Today's price of the risk-less and risky asset is 1 and 75, respectively (all prices quoted in SEK). There is a fixed terminal horizon T of 6 months and throughout K = 68. The word price refers to today's arbitrage-free price. Final answers should be given without decimals. 1 For this question, you should use a two-period Binomial model for the market described above; the parameters should be appropriately chosen so as to correspond to the characteristics of the market. C) Suppose in addition that the risky asset will pay a dividend of 3% (dis- cretely) of its current value every three months. Price the American put option given in b). Hint: Consider whether you would exercise the option just before or just after the dividend payment