(Pricing a put) A stock is currently selling for $60. The price of the stock at the...

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(Pricing a put) 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 an exercise price of $55. Use the binomial option pricing model.

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Principles Of Finance Wtih Excel

ISBN: 9780190296384

3rd Edition

Authors: Simon Benninga, Tal Mofkadi

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