A stock is currently selling for 60. The price of the stock at the end of the
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A stock is currently selling for 60. The price of the stock at the end of the year is expected either to increase by 25% or to decrease by 20%. The riskless interest rate is 5%. Calculate the price of a European put on the stock with exercise price 55. Use the binomial option pricing model.
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The interest charged is different due to the interest rate the bal...View the full answer
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