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Question 5 20 pts Suppose that Stock XYZ is currently trading at $80 and does not pay any dividends. Using a Cox-Ross-Rubinstein binomial tree
Question 5 20 pts Suppose that Stock XYZ is currently trading at $80 and does not pay any dividends. Using a Cox-Ross-Rubinstein binomial tree with two periods, we would like to price a European down and out put option written on this stock with a strike price of $85, barrier level of $75. Assume that the binomial tree parameters are: u = 1.07, and e-rat = 0.99. Find the price of the barrier option. O 1.21 O 3.88 4.98 O 6.33
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Understanding financial statements
Authors: Lyn M. Fraser, Aileen Ormiston
9th Edition
136086241, 978-0136086246
