Question
Problem 21-13 American puts Buffelhead's stock price is $232 and could halve or double in each six-month period (equivalent to a standard deviation of 98%).
Problem 21-13 American puts Buffelhead's stock price is $232 and could halve or double in each six-month period (equivalent to a standard deviation of 98%). Assume that you own an American put option on Buffelhead stock with an exercise price of $232. The interest rate is 21% a year.
1. Calculate the value of the Buffelhead American Put.
2. Calculate the value of the European put.
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Essentials Of Managerial Finance
Authors: Scott Besley, Eugene F. Brigham
13th Edition
0324258755, 9780324258752
