Question: I need the answer ASAP please I will give a like to whoever answers it A stock index is currently 1,500. Its volatility is 18%.
A stock index is currently 1,500. Its volatility is 18%. The risk-free rate is 4% per annum (continuously compounded) for all maturities and the dividend yield on the index is 2.5%. Calculate values for u, d, and p when a six-month time step is used. What is the value a 12-month American put option with a strike price of 1,480 given by a two-step binomial tree. 78.41 79.85 80.04 79.57
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