An investor obtains the following information: • Stock price today = $120 • Stock price one...

An investor obtains the following information:

• Stock price today = $120

• Stock price one year from today can take two values: $110 or $130

• Exercise price = $120

• Risk free interest rate = 5% per annum

What should be the price of a put option on the given stock under these conditions (use discrete discounting)?

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