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4. [4 points) The current price of a nondividend paying stock is $110. Use a two-step binominal model to evaluate a put option on the

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4. [4 points) The current price of a nondividend paying stock is $110. Use a two-step binominal model to evaluate a put option on the stock. The put option has a strike price of $125 and the put expires in 12 months. Assume a risk-free rate of 6%. The projected prices are noted below. Suu = $145.475 Su = $126.50 S = $120 Sdu = Sud = $107.525 Sd = $93.50 Sdd = $79,475

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