Need your help how to solve this step by step, please ) A suppose the price of copper in a good state is $1 20, and in a bad state $0 40, while everything else is the same the forward price is $0 60 The explorations costs are $0 80 The amount is 75m pounds You would like to value the mine with the option to shut down 1) The implied probability of the good state is 2) The expected value of the mine is 3) Is the option to wait more or less valuable with volatility of the copper price

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Question: Need your help how to solve this step by step, please :) A: suppose the price of copper in a good state is $1.20, and

Need your help how to solve this step by step, please :)

A: suppose the price of copper in a good state is $1.20, and in a bad state $0.40, while everything else is the same: the forward price is $0.60. The explorations costs are $0.80.The amount is 75m pounds

You would like to value the mine with the option to shut down.

1) The implied probability of the good state is:

2) The expected value of the mine is:

3) Is the option to wait more or less valuable with volatility of the copper price?

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