Draw the Tree for a Put Option on $20,000 with a Strike

question 41

Multiple Choice

Draw the tree for a put option on $20,000 with a strike price of £10,000.The current exchange rate is £1.00 = $2.00 and in one period the dollar value of the pound will either double or be cut in half.The current interest rates are i_$ = 3% and are i_£ = 2%.