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A stock price is currently $ 4 0 . Over each of the next two three - month periods, it is expected to go up

A stock price is currently $40. Over each of the next two three-month periods, it is expected to go up by 10% or down by 10%. The risk-free interest rate is 12% per annum with continuous compounding.
Calculate the price of a six month American Put option with strike price $42 using the binomial method.

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