The up factor is calculated as $e^{(r - q) \cdot \sqrt{t}}$, where $r$ is the risk-free interest rate, $q$ is the dividend yield, and $t$ is the time period. In this case, $r = 8\%$, $q = 3\%$, and $t = \frac{1}{2}$ year.
The up factor is then $e^{(0.08 - 0.03)
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