Q2 a) Fill in the nodes of a 2 step binomial tree for pricing a European style call and a European style put where r = 5.00%, S = 50,8 = 0.00%, K = 50, T = 3 months, o = 20%. Use our default assumption for u = el--8)T+ovh and d = e(r-8)T-ovh Compute the price of both options and verify that Put Call Parity is satisfied. By far the easiest way to do this is to build a working version of the spread- sheet A4Examples 2 Step Tree, to price European style calls and puts. b) If you have built a spreadsheet, use the inputs and prices you got for the call options in parts a), d), and e) of Question 1 and compute the value of o (different in each case) that would make your binomial tree call price match those prices. If you did this question by hand, verify that using o = 28.31% in a 2 step binomial tree will give you the same price for the call option as you got in part la) (by filling in all the nodes in the tree). Q2 a) Fill in the nodes of a 2 step binomial tree for pricing a European style call and a European style put where r = 5.00%, S = 50,8 = 0.00%, K = 50, T = 3 months, o = 20%. Use our default assumption for u = el--8)T+ovh and d = e(r-8)T-ovh Compute the price of both options and verify that Put Call Parity is satisfied. By far the easiest way to do this is to build a working version of the spread- sheet A4Examples 2 Step Tree, to price European style calls and puts. b) If you have built a spreadsheet, use the inputs and prices you got for the call options in parts a), d), and e) of Question 1 and compute the value of o (different in each case) that would make your binomial tree call price match those prices. If you did this question by hand, verify that using o = 28.31% in a 2 step binomial tree will give you the same price for the call option as you got in part la) (by filling in all the nodes in the tree)