Question: 4 . A share price is currently ( $ 1 8 0 ) . At the end of one year, it will

4. A share price is currently \(\$ 180\). At the end of one year, it will be either \(\$ 203\) or \(\$ 152\). The risk-free interest rate is \(3\%\) per year with continous compounding. Consider an American put on this underlying. Find the exercise prie for which holding the option for one year is equivalent to exercising immediately. This is the brek-even exercise price. What effect would a decrease in the interest rate have on this break-even price?
4 . A share price is currently \ ( \ $ 1 8 0 \ )

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