How would you use binomial option model to price put options? Consider a put option on a stock with a strike of $120. Th

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answerhappygod
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How would you use binomial option model to price put options? Consider a put option on a stock with a strike of $120. Th

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How would you use binomial option model to price put options?
Consider a put option on a stock with a strike of $120. The
underlying stock is trading at $110 right now. Next year, stock is
expected to be either up by 10% or down by 10% from today’s price.
If the risk-free rate of return is 5%, what is the put option
price? Note: Use binomial model and not the put-call parity for
this question.
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