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Not sure how to do this problem, step-by-step would help me out immensely. Thanks! Question 5. A stock is traded for $30 per share today.
Not sure how to do this problem, step-by-step would help me out immensely. Thanks!
Question 5. A stock is traded for $30 per share today. In six months, the stock price will be either $36 or $24. An American put option on this stock has a strike price of $35 and time to maturity of six months. The risk-free interest rate is 6%. Then, the value of the put option is closest to (a) 11.00 dollars. (b) 4.62 dollars. (c) 0.58 dollars. (d) 5.00 dollarsStep by Step Solution
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