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Use the binomial tree technique to price a one year American put option with strike price $105, written on a $100 stock. Use a two
Use the binomial tree technique to price a one year American put option with strike price $105, written on a $100 stock. Use a two step tree, with 6 month time steps. Volatility is 20%. The stock will pay a dividend in 7 months time of $5. Interest rates are 1%, with continuous compounding.
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