Calculate the value of a two-period European-style put option on the stock that has an exercise price of $50.

Q5. Consider a stock currently trading at $50. The periodically compounded interest rate is 3%. Suppose that U = 1.3, and D = 0.8. Calculate the value of a two-period European-style put option on the stock that has an exercise price of $50. Also, determine if early exercise would make economic sense.
(25 marks)