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please fill in the formulas reqired to complete this diagram, PRICING OPTIONS ON ABC STOCK--THE BINOMIAL MODEL Call option payoffs Put option payoffs #NAME? Call
please fill in the formulas reqired to complete this diagram,
PRICING OPTIONS ON ABC STOCK--THE BINOMIAL MODEL Call option payoffs Put option payoffs \#NAME? Call payoff in the The call replicating portfolio \begin{tabular}{l|r} Stock, A & 0.5000( (EQ 12.1) \\ \hline Bonds, B & 42.3794 (Below EQ 12.1) \\ Call price & 7.6206 \end{tabular} There is a combination of the bonds and stocks that gives exactly the same payoffs as the call options The put replicating portfolio (Call = Delta * Stock - Bond) \begin{tabular}{l|r} Stock, A & -0.5000 \\ \hline Bonds, B & -61.2147 \end{tabular} Put price 11.2147 PRICING OPTIONS ON ABC STOCK--THE BINOMIAL MODEL Call option payoffs Put option payoffs \#NAME? Call payoff in the The call replicating portfolio \begin{tabular}{l|r} Stock, A & 0.5000( (EQ 12.1) \\ \hline Bonds, B & 42.3794 (Below EQ 12.1) \\ Call price & 7.6206 \end{tabular} There is a combination of the bonds and stocks that gives exactly the same payoffs as the call options The put replicating portfolio (Call = Delta * Stock - Bond) \begin{tabular}{l|r} Stock, A & -0.5000 \\ \hline Bonds, B & -61.2147 \end{tabular} Put price 11.2147Step by Step Solution
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