A stock price is currently trading at $50. Paul Tripp, CFA wants to value a half-a-year option using a one period binomial model. The stock will either increase in value by 20% or fall in value by 20%. The stock does not pay dividends. The annual risk-free effective interest rate is 3%.a. Calculate the value of a half-a-year European call option on the index with exercise price of $35.b. Calculate the value of a half-a-year European put option on the index with exercise price of $35.

A stock price is currently trading at $50. Paul Tripp, CFA wants to value a half-a-year option using a one period binomial model. The stock will either increase in value by 20% or fall in value by 20%. The stock does not pay dividends. The annual risk-free effective interest rate is 3%.a. Calculate the value of a half-a-year European call option on the index with exercise price of $35.b. Calculate the value of a half-a-year European put option on the index with exercise price of $35.

A stock price is currently trading at $50. Paul Tripp, CFA wants to value a half-a-year option using a one period binomial model. The stock will either increase in value by 20% or fall in value by 20%. The stock does not pay dividends. The annual risk-free effective interest rate is 3%.a. Calculate the value of a half-a-year European call option on the index with exercise price of $35.b. Calculate the value of a half-a-year European put option on the index with exercise price of $35.