A stock is currently selling for 60. The price of the stock at the end of the

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A stock is currently selling for 60. The price of the stock at the end of the year is expected either to increase by 25% or to decrease by 20%. The riskless interest rate is 5%. Calculate the price of a European put on the stock with exercise price 55. Use the binomial option pricing model.

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Financial Modeling

ISBN: 9780262027281

4th Edition

Authors: Simon Benninga

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