4. One-step binomial model (S22-1) Suppose a stock price can go up by 15% or down by...
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4. One-step binomial model (S22-1) Suppose a stock price can go up by 15% or down by 13%
over the next year. You own a one-year put on the stock. The interest rate is 10%, and the current stock price is $60.
a. What exercise price leaves you indifferent between holding the put or exercising it now?
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Related Book For
Principles Of Corporate Finance
ISBN: 9781264080946
14th Edition
Authors: Richard Brealey, Stewart Myers, Franklin Allen, Alex Edmans
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