Question: 10.8 Let S = $100, K = $95, = 30%, r = 8%, T = 1, and = 0. Let u = 1.3, d =

10.8 Let S = $100, K = $95, = 30%, r

10.8 Let S = $100, K = $95, = 30%, r = 8%, T = 1, and = 0. Let u = 1.3, d = 0.8,

and n = 2. Construct the binomial tree for a European put option.

End-of-Chapter Problem 10.9: Repeat the option price calculation in Problem 10.8 for a stock price of $80, keeping everything else fixed. What is the new premium? Find the closest price. [Reference: End-of-Chapter Problem 10.8] Endof Chuamer pnodler 15.3 16.3 17.3 18.3 End-of-Chapter Problem 10.9: Repeat the option price calculation in Problem 10.8 for a stock price of $80, keeping everything else fixed. What is the new premium? Find the closest price. [Reference: End-of-Chapter Problem 10.8] Endof Chuamer pnodler 15.3 16.3 17.3 18.3

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