Question: Repeat Problem 11.1, only assume that r = 0.08 and = 0.Will early exercise ever occur? Why? In Problem 11.1 Consider a one-period binomial
In Problem 11.1
Consider a one-period binomial model with h = 1, where S = $100, r = 0, σ = 30%, and δ = 0.08. Compute American call option prices for K = $70, $80, $90, and $100.
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