Assuming stock price of CBA $110 over the next two six month periods, the price is expected

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Assuming stock price of CBA $110 over the next two six month periods, the price is expected to go up 10% or down 10% during each six month period. RFR is 8% per annum with annual compounding

a. calculate the option premium for a one year European call option with an exercise price of 80

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b. using the same premium calculated in part a estimate the premium of a one year European put option with the same exercise price and same expiration date

Posted Date: May 19, 2024 12:08 PM

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Assuming stock price of CBA $110 over the next two six month periods, the price is expected

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