A stock price is currently ($ 50). It is known that at the end of 6 months
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A stock price is currently \(\$ 50\). It is known that at the end of 6 months it will be either \(\$ 45\) or \(\$ 55\). The risk-free interest rate is \(10 \%\) per annum with continuous compounding. What is the value of a 6-month European put option with a strike price of \(\$ 50\) ?
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First lets calculate the time to maturity in years Time to maturity 6 months 12 months 05 years Next ...View the full answer
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