1. A look back option is a call option that allows the holder to buy the stock at the minimum stock price that occurred over the period to expiration. Suppose, S0 = $129, U = 1.5, D = 0.5, and R = 1.1, use a 3-period binomial model and find the price of such a contract?
2. Emily owns 540 shares of Wolcott Corporation common stock at the beginning of the year with a basis of $112,860.
During the? year, Wolcott declares and pays a 10?% nontaxable stock dividend. What is her basis for each of the 54 shares? received? Emily's basis for each of the 54 shares received is?