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two-step binomial tree put option JU's stock is currently trading at $25.5 a share. JJ's stock can either increase by a factor of 1.12909 (u=1.12909)

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two-step binomial tree put option JU's stock is currently trading at $25.5 a share. JJ's stock can either increase by a factor of 1.12909 (u=1.12909) or decrease by a factor of 1u (d=0.88567) over a period of 6 months. There is a 12 month put option on Ju's stock with a strike price of $28.2. The 6 month risk free rate is 2.956%. Fill in the tree below to find the price of the put option today. fis the put price at each point on the tree. Port is the value of the risk-free portfolio on the tree Sis the stock price u and d stand for up and down respectively Do not use continuous compounding . Do not round intermediate calculations Hint A negative delta means the investor takes a short position in the JJ. A negative portfolio means the investor borrows money, i.e. sell bonds. SO= 25.5 delta = 0.3985 porto= 8.742 fo=1.420 > Sd= 22.585 delta_d 0 Su= 28.792 delta_u 0.61481 3 port_u 15.226 port_d= fd = 0 fu= 2.474 Suu= 32.509 Sod= 20.002 fdd= 0 Sud= 25.50 fud 0 * fuu= 4.309

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