572.EXPLANATIONTHE TREE WILL HAVE THREE NODAL PERIODS

103.572.

Explanation

The tree will have three nodal periods: 0, 1, and 2. The goal is to find the value at node 0. We know the value in nodal period 2: V

=100. In

2

nodal period 1, there will be two possible prices:

V

=[(100+10)/1.09+(100+10)/1.09]/2= 100.917