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Suppose the exchange rate is $1.95/. Let r $ = 7%, r = 4%, u = 1.14, d = 0.89, and T = 0.5. Using
Suppose the exchange rate is $1.95/. Let r $ = 7%, r = 4%, u = 1.14, d = 0.89, and T = 0.5. Using a 2-step binomial tree, calculate the value of a $2.05-strike European put option on the British pound.
Correct answer was $0.1714 - please answer without using excel
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