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TSLA is a non-dividend paying stock. The price of one TSLA share today is $210. TSLA price volatility is 60% per annum. Assume that the
TSLA is a non-dividend paying stock. The price of one TSLA share today is $210. TSLA price volatility is 60% per annum. Assume that the Treasury spot curve is flat at 4% per annum CC. 1. Use a CRR two-step binomial tree to value a 1-year European Put option on the stock with a strike price of $210. Show your valuations on the tree below. 2. Use a CRR two-step binomial tree to value a 1-year American Put option on the stock with a strike price of $210. Show your valuations on the tree below. 3. Use BSM to value a 1-year European Put option on the stock with a strike price of $210. Write down the equations and value of put below
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