Question: Let S = $40, K = $45, r = 3% (continuously compounded), T = 0.5, and d = 0. Let u = 1.2, d =

Let S = $40, K = $45, r = 3% (continuously compounded), T = 0.5, and d = 0. Let u = 1.2, d = 0.85, and n = 1. What are D and B for a European put?

Answer D=-0.7857; B=37.1528

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