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The stock price of Bravo Corp. is currently $100 with u=1.2 and d=0.8. The interest rate at which investors invest in riskless assets is 1%
The stock price of Bravo Corp. is currently $100 with u=1.2 and d=0.8. The interest rate at which investors invest in riskless assets is 1% per year. Using the binomial model, the value of an American put option with an exercise price of $135 and an expiration date 2 years from now should be worth __________ today. What is the exercise premium?
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