Question
assume that the risk free rate is 5% and the stock price dynamics are as follows: What is the price of a call option with
assume that the risk free rate is 5% and the stock price dynamics are as follows:
What is the price of a call option with a strike price of $25?
What is the price of a put option with a strike price of $25? A strike price of $20? 
use the 2-step binomial option pricing model
Binomial Model with 2 periods Dynamics o Stock Prices 26 - 30 - 23 o Risk-free investment - 1.1 1.15 1.15 1.2 1.2 *Step by Step Solution
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Handbook Of Hedge Funds
Authors: François-Serge Lhabitant
1st Edition
0470026634, 978-0470026632
