Use the Information for the Question(s)below

question 9

Essay

Use the information for the question(s)below.
The current price of Kinston Corporation stock is $10.In each of the next two years,this stock price can either go up by $3.00 or go down by $2.00.Kinston stock pays no dividends.The one-year risk-free interest rate is 5% and will remain constant.
-Using risk-neutral probabilities,calculate the price of a two-year put option on Kinston stock with a strike price of $9.

---

Definitions:

Orrorin

An early hominin genus dating back to about 6 million years ago, speculated to be among the first bipedal primates.

Ardipithecus

One of the earliest genera of bipeds that lived in eastern Africa. Ardipithecus is actually divided into two species, the older of which dates to between 5.2 and 5.8 million years ago, and the younger, A. ramidus, dated to around 4.4 million years ago.

Spinal Column

The flexible longitudinal column made of a series of bones called vertebrae, which houses the spinal cord and provides structural support to the body.

Adult Human

An individual who has reached a mature stage of growth and development, typically considered to begin after adolescence.