Intro The current level of a broad stock market index is 1,326. Its dividend yield is 1% and the standard deviation of index returns is 40%. An American put option on the stock has a strike price of $1,340 and expires in 0.4 years. The risk-free rate is 7% (annual, continuously compounded). Value the option using a binomial model with 2 periods of length 0.2 years each. Attempt 2/5 for 10 pts. Part 1 What is the value of d, the down-movement factor? 2+ decimals Submit Attempt 3/5 for 10 pts. Part 2 What is the risk-neutral probability of an up movement? 3+ decimals Submit Part 3 Attempt 1/5 for 10 pts. What is the option payoff in 0.4 years if the stock price went down twice in a row? 0+ decimals Submit Part 4 Attempt 1/5 for 10 pts. What is the value of the option in 0.2 years if the stock price has gone up once? 1+ decimals Submit Part 5 Attempt 1/5 for 10 pts. What is the value of the option in 0.2 years if the stock price has gone down once? 0+ decimals Submit - Attempt 1/5 for 10 pts. Part 6 What is the current value of the option? 0+ decimals Submit Intro The current level of a broad stock market index is 1,326. Its dividend yield is 1% and the standard deviation of index returns is 40%. An American put option on the stock has a strike price of $1,340 and expires in 0.4 years. The risk-free rate is 7% (annual, continuously compounded). Value the option using a binomial model with 2 periods of length 0.2 years each. Attempt 2/5 for 10 pts. Part 1 What is the value of d, the down-movement factor? 2+ decimals Submit Attempt 3/5 for 10 pts. Part 2 What is the risk-neutral probability of an up movement? 3+ decimals Submit Part 3 Attempt 1/5 for 10 pts. What is the option payoff in 0.4 years if the stock price went down twice in a row? 0+ decimals Submit Part 4 Attempt 1/5 for 10 pts. What is the value of the option in 0.2 years if the stock price has gone up once? 1+ decimals Submit Part 5 Attempt 1/5 for 10 pts. What is the value of the option in 0.2 years if the stock price has gone down once? 0+ decimals Submit - Attempt 1/5 for 10 pts. Part 6 What is the current value of the option? 0+ decimals Submit