Question: Please do it by hand, if not excel will suffice as well Construct a 3 period model for an American put with the following info:
Please do it by hand, if not excel will suffice as well
Construct a 3 period model for an American put with the following info:
S0 = $98, X= $100, the stock will either go up by 3% or down by 2% in each period. The risk free rate of return per period is 1%. Assume expiration of the put is at the end of the 3rd period. Calculate the value of a put at each point on the tree,10 total valuations.
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