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Buffelhead's stock price is $ 2 2 8 and could halve or double in each six - month period. Assume that you own a one
Buffelhead's stock price is $ and could halve or double in each sixmonth period. Assume that you own a oneyear American put option on Buffelhead stock with an exercise price of $ The interest rate is a year.
A Would you ever want to exercise an American put early?
B Calculate the value of the Buffelhead American put.
Note: Do not round intermediate calculations. Round your answer to decimal places.
C Calculate the value of the put if it had been Europeanstyle.
Note: Do not round intermediate calculations. Round your answer to decimal places.
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