Suppose Cisco's current stock price is $80 and it is expected to either rise to 120 or

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Suppose Cisco's current stock price is $80 and it is expected to either rise to 120 or fall to 60 by next April (assume 6-months from today). Also assume you can borrow at the risk-free rate of 3% per 6 months.

What would you pay for a put option on Cisco that expires in 6-months and has a strike price of $70? A strike of $80? A strike of $90?

Related Book For answer-question

Fundamentals of Financial Management

ISBN: 978-0324597707

12th edition

Authors: Eugene F. Brigham, Joel F. Houston

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Posted Date: Apr 25, 2023 11:47 PM

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Suppose Cisco's current stock price is $80 and it is expected to either rise to 120 or

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Fundamentals of Financial Management

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