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ABC Corps stock is currently trading at exist51. Over the next year, the stock can either increase by 10% with 60% probability or it can

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ABC Corps stock is currently trading at exist51. Over the next year, the stock can either increase by 10% with 60% probability or it can decrease by 10% with 40% probability. Using the portfolio replication approach compute the current put option premium on ABC Corps stock assuming the following: the exercise price on the put option is exist53 and it expires in one year. T-bills yield 7%

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