Question: PROBLEM SET 7 : BINOMIAL TREES 2 . ( 2 5 Points ) A non - dividend paying stock has a current price of $

PROBLEM SET 7: BINOMIAL TREES
2.(25 Points) A non-dividend paying stock has a current price of $50 per share. Over the next 6 months, it is assumed that the price will either increase in value by 10% or decrease in value by 13%. The continuously compounded risk-free rate is 4%. Using a one-period binomial model, the price of a 50-strike, 6-month European call option for this stock is $3.203. Compute the price of a 50-strike, 6-month European put option for the same stock.
PROBLEM SET 7: BINOMIAL TREES 2.(25 Points) A non-dividend paying stock

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