help ASAP! need answered. please solve the following! Will upvote once answered thank you in advance! The possible stock prices for XYZ Corporation over the next two years are: Year: 0 1 2 Suu = 70 Puu = Su = 60 Pu = S =50 Sud = 50 P = Pud = Sd = 40 Pd = Sdd = 30 Pdd =

The risk-free interest rate is 10% per year and the stock pays no dividends. Consider a European put with an exercise price of $50 and a time to expiration of 2 years.

a). Compute the value of the put at year 0 using the risk-neutral pricing approach.

b). Construct the replication portfolio for the put from year 0 to year 1.

c). Construct a synthetic bond with the stock and put in year 0 and compute the implied interest rate.

d). Consider a two-year American put with the same strike. Compute the early exercise premium of the American put.