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The stock of a company is currently quoted in the market at Rs.150. The price of the stock is expected to go up or down
The stock of a company is currently quoted in the market at Rs.150. The price of the stock is expected to go up or down by 10% in next one year and by 15% in the second year. The risk-free interest rate in the economy is 6%. Required:Using two-step Binomial Model, find out the price of a 2-year American put option on the companys stock with strike price of Rs.175
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