Problem #3: Consider a European put option on a stock, with a $69 strike and 1-year to expiration. The stock has a continuous (5 mare dividend yield of 6%, and its current price is $14. Suppose the volatility of the stock is 23%. The continuously compounded risk-free interest rate is 6%. Use a one-period binomial tree to calculate the following: (a) The payoff for up movement. (b) The payoff for down movement. (c) The corresponding replicating portfolio: The number of shares. (d) The corresponding replicating portfolio: The lent/borrowed amount. (e) The option premium. (A) 50.38 (B) 52.38 (C) 53.38 (D) 51.38 (E) 54.38 Problem #3) Select 1 Part (a) choices (A) 59.88 (B) 58.88 (C) 57.88 (D) 60.88 (E) 56.88. Problem 30) Select t Part (b) choices. (A) 1.06 (B) 2.06 (C) 3.06 (D) 0.94 (E) 0.06 Problem 3(c) Select t Part (c) choices (A) 60.98 (B) 62.98 (C) 64.98 (D) 63.98 (E) 61.98 Problema: Select t Part (a) choices (A) 49.80 (B) 50.80 (C) 51.80 (D) 48.80 (E) 47.80 Probleme Select t Parte choices Problem #3: Consider a European put option on a stock, with a $69 strike and 1-year to expiration. The stock has a continuous (5 mare dividend yield of 6%, and its current price is $14. Suppose the volatility of the stock is 23%. The continuously compounded risk-free interest rate is 6%. Use a one-period binomial tree to calculate the following: (a) The payoff for up movement. (b) The payoff for down movement. (c) The corresponding replicating portfolio: The number of shares. (d) The corresponding replicating portfolio: The lent/borrowed amount. (e) The option premium. (A) 50.38 (B) 52.38 (C) 53.38 (D) 51.38 (E) 54.38 Problem #3) Select 1 Part (a) choices (A) 59.88 (B) 58.88 (C) 57.88 (D) 60.88 (E) 56.88. Problem 30) Select t Part (b) choices. (A) 1.06 (B) 2.06 (C) 3.06 (D) 0.94 (E) 0.06 Problem 3(c) Select t Part (c) choices (A) 60.98 (B) 62.98 (C) 64.98 (D) 63.98 (E) 61.98 Problema: Select t Part (a) choices (A) 49.80 (B) 50.80 (C) 51.80 (D) 48.80 (E) 47.80 Probleme Select t Parte choices