Question
TenCent is currently trading at $7.35. The call and put options have two years to maturity, and the risk-free is 4.35%. The exercise price is
TenCent is currently trading at $7.35. The call and put options have two years to maturity, and the risk-free is 4.35%. The exercise price is $8.0. If the up factor is u = 1.445, and the down factor is d = 0.715. (a) Find the price of both the call and put options separately using the Binomial method. (b) Show that the Put-Call Parity holds.
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a Finding Call and Put Option Prices with the Binomial Method Well use the binomial option pricing m...
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
10th Canadian edition
1259261018, 1259261015, 978-1259024979
