A stock price can take only two possible values for 1 period u=1.4 So $100 d=0.8...
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A stock price can take only two possible values for 1 period u=1.4 So $100 d=0.8 ST$140 P probability of going up=0.6 ST$80 (1P) probability of going down=0.4 X=$110 T=2 period R₁ 5% per period No dividend payment before the expiration date European style call option 83
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Binomial Option Pricing Model It provides investors with a tool to help evaluate stock options It as View the full answer
Related Book For
Microeconomics An Intuitive Approach with Calculus
ISBN: 9780538453257
1st edition
Authors: Thomas Nechyba
Posted Date:
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