Question: Please solve questions 1 and 2 either by hand using a binomial tree or in excel using a bionmial tree as I need to show
Please solve questions and either by hand using a binomial tree or in excel using a bionmial tree as I need to show working:
Create a European Call Option with eight movements and give me the price.
The inputs are
Spot
Strike
R
Delta P
Periods
Pu
Pd
Create an American Call Option with eight movements and give me the price.
The inputs are
Spot
Strike
R
Delta P
Periods
Pu
Pd
Randomly change the inputs and tell me how the price changes and if it is an expected direction on both European and American
How would the answers to number three change if we did a put option instead of a call option?
Would we expect the changes to be higher for an American or European option?
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