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post all the steps Let S = $45, r = 7% (continuously compounded), d = 1%, s = 25%, T = 2. In this situation,
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Let S = $45, r = 7% (continuously compounded), d = 1%, s = 25%, T = 2. In this situation, the appropriate values of u and dare 1.36343 and 0.82696, respectively. Using a 2-step binomial tree, calculate the value of a $50-strike European put option.
| a. | $6.702 | |
| b. | $6.076 | |
| c. | $5.282 | |
| d. | $5.227 | |
| e. | $5.666
|
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