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Astro stock is currently trading at 100. The volatility of the stock is 40%. The stock has a dividend yield of 5% per year. Riskless
Astro stock is currently trading at 100. The volatility of the stock is 40%. The stock has a dividend yield of 5% per year. Riskless rates are 6% per year continuously compounded. Use a two period binomial lattice to price an American call option with strike 90, and expiration date 1 year. Compare this price to that of an otherwise identical European call.
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