Problem 2 Consider a stock modeled by a BLM with parameters u = 1.0594 and d= 0.9439. The current price of the stock is $225 and the stock pays no dividends. A certain call and put option have an expiration 3 months from now and the strike price is $200. The current annual rate of interest (risk-free) is 3% compounded monthly. Determine the theoretical value of the call and put using the binomial option approach. Verify that your results satisfy the put-call parity equation