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All i want to know is... How do you get the values in the binomial tree.... as in how do you get 105,95, 110.25, 99.75,
All i want to know is... How do you get the values in the binomial tree.... as in how do you get 105,95, 110.25, 99.75, and 90.25
Please explain and show work.... Thanks!
Put option Exampie -Grifirnder Corp is cullentey stoo pol shere - If v=1.05,0:0.85, and the vishefree tate is 1%, hhat is the pine of a 2y put uption with ke $100 ? Put option (k=100) Pu=[(0.601)(0)+(10.601)(0.25)]e(1y2)(1)=0.1Pd=[(0.601)(0.25)+(10.601)(9.75)]e(1y)(1)=4.00 Put value today: put =[(0.601)(0.1)+(10.601)(4)]e(1y)(1)=1.63Step by Step Solution
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