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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Principles Of Corporate Finance

ISBN: 9781264080946

14th Edition

Authors: Richard Brealey, Stewart Myers, Franklin Allen, Alex Edmans

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Question Posted: Jul 31, 2024 08:04 AM

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4. One-step binomial model (S22-1) Suppose a stock price can go up by 15% or down by...

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Principles Of Corporate Finance

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