Use the binomial option pricing model to calculate the price of a 12 month call using the following data Up move expected 12 Down move expected 6 Initial Share Price 50 00 Risk free Interest Rate 4 Exercise Price 50 00 Use put call parity to calculate the price of the matching put (i e at the same ...

To calculate the price of a 12month call option using the binomial option pricing model we need to f ...

Use the binomial option pricing model to calculate the price of a 12 month call using the

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1. Use the binomial option pricing model to calculate the price of a 12 month call using the following data :

Up move expected	12%
Down move expected	-6%
Initial Share Price	50.00
Risk-free Interest Rate	4%
Exercise Price	50.00

Use put-call parity to calculate the price of the matching put (i.e. at the same strike price).
What would be the price of the $55 call?

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Introduction To Corporate Finance

ISBN: 9781118300763

3rd Edition

Authors: Laurence Booth, Sean Cleary

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Posted Date: May 22, 2023 09:41 AM

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