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An American put option on a non-dividend-paying stock has 4 months to maturity. The exercise price is $21, the stock price is $20, the risk-free
An American put option on a non-dividend-paying stock has 4 months to maturity. The exercise price is $21, the stock price is $20, the risk-free rate of interest is 10% per annum, and the volatility is 30% per annum. Use the explicit version of the finite difference approach to value the option. Use stock price intervals of $4 and time intervals of 1 month.
how to use the above equation to calculate the value of the option? please show me the process
fj= afitu-,+b; :1 + cilj Here, Different values of option at time (i+1) At are file and fi-1.j+ a, b, and care constant fj= afitu-,+b; :1 + cilj Here, Different values of option at time (i+1) At are file and fi-1.j+ a, b, and care constantStep by Step Solution
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