Question: please solve this question only if you solved at least 1000 questions on chegg Q&A. (new guys are doing it all wrong). SOLVE IT IN
please solve this question only if you solved at least 1000 questions on chegg Q&A. (new guys are doing it all wrong).
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Consider the following case of a binomial option pricing. A stock is currently trading at $50. Next period the stock price can go up to Smax or down to Smin. The call option with the exercise price of $50 is currently trading at $9.14. The risk-free rate is 7.5% and the hedge ratio is 5/7. Calculate numerical values of Small and Smin. Consider the following case of a binomial option pricing. A stock is currently trading at $50. Next period the stock price can go up to Smax or down to Smin. The call option with the exercise price of $50 is currently trading at $9.14. The risk-free rate is 7.5% and the hedge ratio is 5/7. Calculate numerical values of Small and Smin
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