Question
Walmart stock is currently trading at $57/share. Assume that its value in exactly one year is a random variable with the probability mass function given
Walmart stock is currently trading at $57/share. Assume that its value in exactly one year is a random variable with the probability mass function given below. What is the fair premium for a one-year put option on Walmart stock with a strike price of $52?
| Price | $42 | $48 | $51 | $54 | $63 |
| Probability | 0.1 | 0.2 | 0.1 | 0.2 | 0.4 |
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Personal Finance
Authors: Jeff Madura, Hardeep Singh Gill
4th Canadian edition
134724712, 134724713, 9780134779782 , 978-0134724713
