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Assume that you are the holder of a European put option without a dividend on...

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Finance

Assume that you are the holder of a European put option without a dividend on the share in Handelsbanken A. Handelsbanken A is traded today for 150 EURO. During each half-year period, the price can either increase by 25% or decrease by 20%. The option contract has a term of 1 year and an exercise price of 155 EURO. The risk-free 1-year interest rate is 3%.

a) Calculate the value of your European put option!

b) Also calculate the value of the option contract if the contract had instead been a US put option.

I don't need the answer by a table or some system. I need it as a basic math step for step please.

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