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1. Please use binomial option pricing model to derive the value of a one-year put option. The current share price is 0 = 100 and
1. Please use binomial option pricing model to derive the value of a one-year put option. The current share price is 0 = 100 and exercise price = 110. The T-bill rate is = 10% per year and annual standard deviation is 20%.
2. Use the Black-Scholes formula to find the value of the same option in the previous problem and compare the difference between these two types of methods.
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