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Consider a three-period binomial model on a stock price with T = 1, u/d = 4/3, p* = 1/3, So = 80 and r =
Consider a three-period binomial model on a stock price with T = 1, u/d = 4/3, p* = 1/3, So = 80 and r = 8 = 3%. (a) Find the price for a 85-strike European call. (b) Find the price for a 85-strike American call. Consider a three-period binomial model on a stock price with T = 1, u/d = 4/3, p* = 1/3, So = 80 and r = 8 = 3%. (a) Find the price for a 85-strike European call. (b) Find the price for a 85-strike American call
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