15.24. A stock index currently stands at 300 and has a volatility of 20%. The risk-free interest...
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15.24. A stock index currently stands at 300 and has a volatility of 20%. The risk-free interest rate is 8% and the dividend yield on the index is 3%. Use a three-step binomial tree to value a six-month put option on the index with a strike price of 300 if it is
(a) European and
(b) American?
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