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Problem #3 A stock is currently selling for 60 . The price of the stock at the end of the year is expected either to

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Problem \#3 A stock is currently selling for 60 . The price of the stock at the end of the year is expected either to increase by 25% or to decrease by 20%. The riskless interest rate is 5%. Calculate the price of a European put on the stock with exercise price 55 . Use the binomial option pricing model

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