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Today’s price of Marriot (MAR) is $75. MAR does not pay dividends. Each year, the stock...

Today’s price of Marriot (MAR) is $75. MAR does not pay dividends. Each year, the
stock price of MAR can either go up or down. If the stock price goes up, the gross rate
of return is u = 2. If the stock price goes down, the gross rate of return is d = 0.5.
The c.c. risk-free interest rate is zero percent. You are interested in a European put
option on MAR with a strike of $80 and a maturity of two years. Assume there is no
arbitrage.

What is the price of the put option?

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