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TFAK stock price is $242. It will either increase or decrease 11% in month 1 and 15% in month 2. The monthly risk-free interest rate
TFAK stock price is $242. It will either increase or decrease 11% in month 1 and 15% in month 2. The monthly risk-free interest rate is 6.2%. Using the risk-neutral probability approach, find the premium of a 2-month put option with strike price of $237. Using the replicating portfolio approach, find the premium of a 1-month call option with strike price of $242. (Round to 4 decimal places)
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