3. A stock currently selling for $50 has an annual returns variance equal to 0.36. The riskless...
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3. A stock currently selling for $50 has an annual returns variance equal to 0.36. The riskless return rate equals 0.08 per year. Under the binomial framework, what would be the value of nine-month (0.75 year) European calls and European puts with striking prices equal to $80 if the number of tree steps (n) were
a. two?
b. three?
c. eight?
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