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Consider the following information about an American put option: 1 2 3 4 5 6 7 Risk-free rate Option type Option type Strike price Years
Consider the following information about an American put option: 1 2 3 4 5 6 7 Risk-free rate Option type Option type Strike price Years to exp. No. of periods Period length B 0.05 EAR Amer. Put 280 2 2 1 years =B5/B6 271 0.38 9 Stock price now 10 Sigma 11 Up 12 Down 0.4623 -0.3161 =EXP(B$10*B$7^0.5)-1 =EXP(-B$10*B$7^0.5)-1 Part 1 Attempt 3/10 for 10 pts. What is the stock price after two periods if it has gone down twice? 0+ decimals Submit Part 2 | Attempt 1/10 for 10 pts. What should be the price (premium) of the put option after one period if the stock price has gone up? 2+ decimals Submit
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