Question: You are attempting to value a put option with an exercise price of $ 1 0 8 and one year to expiration. The underlying stock

You are attempting to value a put option with an exercise price of $

108

and one year to expiration. The underlying stock pays no dividends, its current price is $

108,

and you believe it has a

50 %

chance of increasing to $

122

and a

50 %

chance of decreasing to $

94 .

The risk

-

free rate of interest is

11 % .

Calculate the value of a put option with exercise price $

108 .

Note: Do not round intermediate calculations. Round your answer to

2

decimal places.You are attempting to value a put option with an exercise price of $

108

and one year to expiration. The underlying stock pays no dividends, its

current price is $

108,

and you believe it has a

50 %

chance of increasing

to $

122

and a

50 %

chance of decreasing to $

94 .

The risk

-

free rate of

interest is

11 % .

Calculate the value of a put option with exercise price

108 .

Note: Do not round intermediate calculations. Round your answer to

2

decimal places.

Answer is complete but not entirely correct.

You are attempting to value a put option with an exercise

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