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Dow Chemical (DOW) is trading at $56 per share. At the end of six months, DOWs stock price can take on only one of two
Dow Chemical (DOW) is trading at $56 per share. At the end of six months, DOWs stock price can take on only one of two values: it can either go up to 75 or it can decline to 38. The risk free interest rate (continuously compounded) is 1% per year. Value a six-month European put option with strike $55 using the risk- neutral valuation approach of the binomial model.
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