Find the price of a 1-year European put option for 1 with strike price of 1.7$/ if

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Find the price of a 1-year European put option for £1 with strike price of 1.7$/£ if current spot rate is 1.6$/£ and next year spot rate can be either 1.8$/£ or 1.4$/£. The U.S. interest rate is 8% and the U.K interest rate is 5%.

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Fundamentals of Futures and Options Markets

ISBN: 978-0132993340

8th edition

Authors: John C. Hull

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Posted Date: Oct 13, 2020 02:49 AM

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Find the price of a 1-year European put option for 1 with strike price of 1.7$/ if

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The Price of the given option will be zero because at any of the given steps of the model this ... View the full answer

Fundamentals of Futures and Options Markets

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