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A stock is currently priced at $50. A put option can be written on a stock with a strike price of $55 and maturity of
A stock is currently priced at $50. A put option can be written on a stock with a strike price of $55 and maturity of 6 months. The price of the stock will either go up by $20 or drop by $10 on the expiration date. Assuming the risk-free rate is 6%, what is the value of the put option according to the binomial option pricing model.
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