Q9: Konstantin wants to buy a 2 month European style put option on $1 million USD. The spot USD/CAD exchange rate is 1.058. The Canadian risk free rate is 2.938% and the US risk free rate is 2.750%. USD/CAD exhange rate volatility is 23.00%. Build a 3 step binomial tree to tell Konstantin how much he should pay if the strike price is 1.05. A) $38485.73 B) $50031.44 C $30788.58 D) $32712.87 E) $42331.30 Q1: IHNI is currently trading at $52.00 and pays a continuously com- pounded dividend of 1.25%. The risk free rate is 2.50%, and IHNI has a daily volatility of 0.53%. Assume a year has 360 days (and a month has 30 days). Use the replicating porfolio method with u = er-8)T+oVT d= e(r-8)T-OVT to price a European style call option expiring in 10 months with a strike price of 53.00. . = A) C = $1.81, A. $1.81, A = 0.40, B = -18.98 B) C = $2.13, A = 0.47, B = -22.33 C) C = $2.88, A = 0.64, B = -30.15 = = = D) C = $1.71, A = 0.38, B = -17.86 E) C = $2.03, A = 0.45, B = -21.21 = = =