I have all the answers for this quiz, but I do not know how to solve most of them. I know the first part of finding Up, down, current price.

This is calculating delta with option price, I think.

Please help me how to get all these answers. I want to learn all procedures from coursehero's tutors.

If you could solve by hand, that will be great, but you cannot, using excel is also fine for me.

Thank you very much.

Quiz 9 -EBF 473 - Spring 2015 - Key SkyCorp, the solar power satellite manufacturer, is currently selling for $100. If u=1.08, d=1/u, and r=1%, how much is a option to be exercised at 105 worth after ONE period if the payoff is sqrt(abs(S-K)), i.e. the square root of the absolute value of S-K? Use the binary method and the payoff formula given above. Show your work! ans = 100.0000 108.0000 0 92.5926 ans = 1.7321 3.5224 delta = 0.1162 valueAtEnd = 14.2818 valueAtStart = 14.1404 t= 2.5203 1.7321 0 3.5224 Final answer = 2.5203