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PLEASE ANSWER THIS QUESTION (_I We model the price of a nondividendpaying stock as a twostep binomial tree model with time step being 6 months.

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PLEASE ANSWER THIS QUESTION

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(_I We model the price of a nondividendpaying stock as a twostep binomial tree model with time step being 6 months. Currently, the price of this stock is $100 per share. At each time step the stock price will go up or down by 5%. Suppose that the riskfree rate is always 5% per annum with continuous compounding. What is the price of a 1year American put option with a strike price of $104 on this stock?

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