n #5: Consider an American call option on a stock, with a $32 strike and 1-year to expiration. The stock has a continuous dividend yield of 8%, and its current price is $51. Suppose the volatility of the stock is 16%. The continuously compounded risk-free interest rate is 9%. Use a three-period binomial tree to calculate the following: (a) The payoff at time 2: Up movement. (b) The payoff at time 2: Middle movement. (e) The payoff at time 2: Down movement. (d) The payoff at time 1: Up movement. (e) The payoff at time 1: Down movement. (1) The option cost at time 0. (A) 30.76 (B) 27.76 (C) 31.76 (D) 29.76 (E) 28.76 Slem (a): Select I Part (a) choices (A) 21.34 (B) 23.34 (C) 22.34 (D) 19.34 (E) 20.34 blem 5(b) Select 1 Part (b) choices. (A) 9.68 (B) 10.68 (C) 8.68 (D) 6.68 (E) 7.68 blem 5(c): Select t Part (C) choices (A) 25.12 (B) 21.12 (C) 24.12 (D) 23.12 (E) 22.12 blem 5(d). Select I Part (d) choices (A) 11,66 (B) 12.66 (C) 10.66 (D) 14.66 (E) 13.66 Part (e) choices. blem #5(e): Select (A) 17.00 (B) 16,00 (C) 18.00 (D) 20.00 (E) 19.00 blem #5(): Select 1 Part (1) choices n #5: Consider an American call option on a stock, with a $32 strike and 1-year to expiration. The stock has a continuous dividend yield of 8%, and its current price is $51. Suppose the volatility of the stock is 16%. The continuously compounded risk-free interest rate is 9%. Use a three-period binomial tree to calculate the following: (a) The payoff at time 2: Up movement. (b) The payoff at time 2: Middle movement. (e) The payoff at time 2: Down movement. (d) The payoff at time 1: Up movement. (e) The payoff at time 1: Down movement. (1) The option cost at time 0. (A) 30.76 (B) 27.76 (C) 31.76 (D) 29.76 (E) 28.76 Slem (a): Select I Part (a) choices (A) 21.34 (B) 23.34 (C) 22.34 (D) 19.34 (E) 20.34 blem 5(b) Select 1 Part (b) choices. (A) 9.68 (B) 10.68 (C) 8.68 (D) 6.68 (E) 7.68 blem 5(c): Select t Part (C) choices (A) 25.12 (B) 21.12 (C) 24.12 (D) 23.12 (E) 22.12 blem 5(d). Select I Part (d) choices (A) 11,66 (B) 12.66 (C) 10.66 (D) 14.66 (E) 13.66 Part (e) choices. blem #5(e): Select (A) 17.00 (B) 16,00 (C) 18.00 (D) 20.00 (E) 19.00 blem #5(): Select 1 Part (1) choices