Transcribed image text: 8: Consider a European call option on a stock, with a $52 strike and 1-year to expiration. The stock has a continuous dividend yield of 3%, and its current price is $78. Suppose the volatility of the stock is 28%. The continuously compounded risk-free interest rate is 5%. Use a two-period Cox-Ross-Rubinstein tree to calculate the following: (a) The payoff at time 2: Up movement. (b) The payoff at time 2: Middle movement. (c) The payoff at time 2: Down movement. (d) The payoff at time 1: Up movement. (e) The payoff at time 1: Down movement. (f) The option cost at time 0. (A) 61.90 (B) 65.90 (C) 64.90 (D) 62.90 (E) 63.90 -oblem #8(a): Select 1 Part (a) choices. (A) 23.00 (B) 25.00 (C) 27.00 (D) 24.00 (E) 26.00 oblem #8(b): Select 1 Part (b) choices. (A) -0.50 (B) 0.50 (C) 2.50 (D) 1.50 (E)-1.50 oblem #8(c): Select 1 Part (c) choices. (A) 41.95 (B) 43.95 (C) 42.95 (D) 39.95 (E) 40.95 oblem #8(d): Select 1 Part (d) choices. (A) 9.32 (B) 11.32 (C) 10.32 (D) 12.32 (E) 8.32 oblem #8(e): Select 1 Part (e) choices. (A) 23.23 (B) 25.23 (C) 27.23 (D) 24.23 (E) 26.23 oblem #8(f): Select 1 Part (f) choices. Transcribed image text: 8: Consider a European call option on a stock, with a $52 strike and 1-year to expiration. The stock has a continuous dividend yield of 3%, and its current price is $78. Suppose the volatility of the stock is 28%. The continuously compounded risk-free interest rate is 5%. Use a two-period Cox-Ross-Rubinstein tree to calculate the following: (a) The payoff at time 2: Up movement. (b) The payoff at time 2: Middle movement. (c) The payoff at time 2: Down movement. (d) The payoff at time 1: Up movement. (e) The payoff at time 1: Down movement. (f) The option cost at time 0. (A) 61.90 (B) 65.90 (C) 64.90 (D) 62.90 (E) 63.90 -oblem #8(a): Select 1 Part (a) choices. (A) 23.00 (B) 25.00 (C) 27.00 (D) 24.00 (E) 26.00 oblem #8(b): Select 1 Part (b) choices. (A) -0.50 (B) 0.50 (C) 2.50 (D) 1.50 (E)-1.50 oblem #8(c): Select 1 Part (c) choices. (A) 41.95 (B) 43.95 (C) 42.95 (D) 39.95 (E) 40.95 oblem #8(d): Select 1 Part (d) choices. (A) 9.32 (B) 11.32 (C) 10.32 (D) 12.32 (E) 8.32 oblem #8(e): Select 1 Part (e) choices. (A) 23.23 (B) 25.23 (C) 27.23 (D) 24.23 (E) 26.23 oblem #8(f): Select 1 Part (f) choices