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1. A stock price is currently $40. Over each of the next 3 -month periods it is expected to go up by 10% or down

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1. A stock price is currently $40. Over each of the next 3 -month periods it is expected to go up by 10% or down by 10%. The risk-free rate is 12% per annum with continuous compounding. . A) What is the value of a 6-month European put option with a strike price of \$42? What would be the extra value of an American put option with same strike price

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