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3. A 3-month American call option on a stock has a strike price of $19. The stock price is $20, the risk-free rate is 3%
3. A 3-month American call option on a stock has a strike price of $19. The stock price is $20, the risk-free rate is 3% per annum, and the volatility is 25% per annum. A dividend of $3.5 is expected in 1.5 months. Use a three step binomial tree to calculate the option price Step by Step Solution
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Public Finance In Canada
Authors: Harvey S. Rosen, Wen, Snoddon
4th Canadian Edition
0070071837, 978-0070071834
