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The European markets has witnessed a down trend early this year, and the share price of Mercedes-Benz (MB) yesterday is 50, declined by 25 percent
The European markets has witnessed a down trend early this year, and the share price of Mercedes-Benz (MB) yesterday is 50, declined by 25 percent from last week. An investor considers a TWO-STAGE binomial model with a European put with an exercise price of 40 on MB priced at 38 today. The investors assumes that the stock price can go up by 10 percent or down by 10 percent in each of two binomial periods. The risk-free rate is 12 percent.(Use three decimal places when working. Show A of your workings. No Excel files or such)
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Management Accounting
Authors: Leslie G. Eldenburg, Albie Brooks, Judy Oliver, Gillian Vesty, Rodney Dormer, Vijaya Murthy, Nick Pawsey
4th Edition
0730369382, 978-0730369387
