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pleaaaaase help QUESTION 42 The current price of a non-dividend paying stock is $80 with a volatility of 35%. The risk-free rate is 11%. Consider
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QUESTION 42 The current price of a non-dividend paying stock is $80 with a volatility of 35%. The risk-free rate is 11%. Consider a European Call option with murity of 2 years and stre price of $95. Answer the following questions, rounding your answers to 3 decimal places. Show your working in detail and justify your awwers. 1. What is the coefficient for the up movement? 2. What is the coefficient for the down movement? 3. Use a two-step binomial tree, like the one in the figure above, to value the option. 4. Calculate A at points A, B and C (points based on the figure above). 5. What does A signity for a market maker who has sold 1 option? TTTT Paragraph. Arial 3 (12pt) The current price of a non-dividend paying stock is $30 with a volatility of 35%. The risk-free rate is 11%. Consider a European Call option with maturity of 2 years and strice price of $95. Answer the following questions, rounding your answers to 3 decimal places. Show your working in detail and justify your answers 1. What is the coefficient for the up movement? 2. What is the coefficient for the down movement? 3. Use a two-step binomial tree, like the one in the figure above, to value the option 4. Calculate & at points A, B and C (points based on the figure above) 5. What does A signity for a market maker who has sold 1 option Step by Step Solution
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