Question
The current stock price of a company is $37.50, the potential up movement / period of the stock price is 22.0%, the potential down movement
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The current stock price of a company is $37.50, the potential up movement / period of the stock price is 22.0%, the potential down movement / period of the stock price is -13.00%, the risk-free rate is 4.0% per period, the exercise price of an one-period American call option on the stock is $39.00, the exercise price of an one-period American put option on the stock is $39.00, the time to maturity for both options is 0.58 years, and the number of periods for both options is 1 (i.e. a one period binomial tree). Determine the current prices of the call and put.
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