PROBLEM 2. Consider a two-step Binomial model. In Figure 1 you are given an incomplete pricing tree, which corresponds to a European put option with strike price K = 65. (a) (5 Points) Compute the per period interest rate r and the risk-neutral probability p*. (b) (10 Points) Find the price of the put option at t = 0. Moreover, determine the complete binomial tree for the stock price. 2.6545 PE(O) 14.6 17.09 35.06 Figure 1: European put with K = 65 of Problem 2