Consider a stock index currently trading at 128. You have modeled the evolution of this index in a binomial tree and have come up with the following parameters: $u= 1.08$ , $d = 0.93$ . The gross risk-free rate per step of the binomial tree is $R = 1.03$ and the dividend yield on the index is $\delta = 0.01$ . What is the price of a one-period put option with a strike of $K = 130$ ?
A) 7.93
B) 7.09
C) 7.02
D) 6.36

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The Answer of Consider a stock index currently trading at 128. You have modeled the evolution of this index in a binomial tree and have come up with the following parameters: $u= 1.08$ , $d = 0.93$ . The gross risk-free rate per step of the binomial tree is $R = 1.03$ and the dividend yield on the index is $\delta = 0.01$ . What is the price of a one-period put option with a strike of $K = 130$ ?
A) 7.93
B) 7.09
C) 7.02
D) 6.36

Consider a Stock Index Currently Trading at 128 u=1.08u= 1.08u=1.08 d=0.93d = 0.93d=0.93

Consider a Stock Index Currently Trading at 128 $u= 1.08$ $d = 0.93$