Repeat the previous problem assuming that the stock pays a continuous dividend of 8% per year (continuously

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Repeat the previous problem assuming that the stock pays a continuous dividend of 8% per year (continuously compounded). Calculate the prices of the American and European puts and calls. Which options are early-exercised? Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Derivatives Markets

ISBN: 9789332536746

3rd Edition

Authors: Robert McDonald

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