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Questions 11 . TKAK stock price is $241. It will either increase or decrease 11% in month 1 and 15% in month 2. The monthly

Questions 11 .

TKAK stock price is $241. It will either increase or decrease 11% in month 1 and 15% in month 2. The monthly risk-free interest rate is 5.6%.

A. Using the risk-neutral probability approach, find the premium of a 2-month put option with strike price of $240.

B. Using the replicating portfolio approach, find the premium of a 1-month call option with strike price of $241.

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