1. Consider an at-the-money American put on a stock whose current price is S = 50. Find...
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1. Consider an at-the-money American put on a stock whose current price is S = 50. Find the early exercise boundary point for t = 0.5 for a series of these puts, when T = 1, 2, 3, 4, ..., 10. Assume that the risk-free interest rate is 8 percent and that σ= 30 percent. Can you draw any conclusions from this exercise?
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