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Use a binomial tree to price an option. a. Asset price $100 b. 80% probability that it will rise to $107 c. 20% chance it
Use a binomial tree to price an option.
a. Asset price $100
b. 80% probability that it will rise to $107
c. 20% chance it drops to $98
d. Strike price $105
a. Asset price $100
b. 80% probability that it will rise to $107
c. 20% chance it drops to $98
d. Strike price $105
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Step: 1
To price an option using a binomial tree we can follow the steps outlined below 1 Calculate the up a...
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Step: 2
Step: 3
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Options Futures and Other Derivatives
Authors: John C. Hull
10th edition
013447208X, 978-0134472089
