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A stock index is currently 810 and it has volatility of 9 % and a dividend yield 2 %. The riskless rate of interest is 4.25% per annum continuously compounded. A European-style put option is written on this stock index with a $ 907 strike price and 6 months to expiry. What is the price of this put option based on the 2-step binomial tree under the risk-neutral framework?
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