You are to price a one$-$year straddle on a nondividend$-$paying stock with a two$-$period binomial

tree. You are given:

$($i$)$ The straddle can only be exercised at the end of one year.

$($ii$)$ The stock currently sells for $$60.$

$($iii$)$ The stock has volatility $25\%.$

$($iv$)$ The strike price of the straddle is $$50.$

$($v$)$ The continuously compounded risk$-$free interest rate is $8\%.$

Apply two$-$period binomial tree to calculate the current price of the straddle.