Question: Suppose you are attempting to value a 1 - year expiration option on a stock with volatility ( i . e . , annualized standard
Suppose you are attempting to value a year expiration option on a stock with volatility ie annualized standard deviation of
What would be the appropriate values for and if your binomial model is set up using:
a period of year.
b subperiods, each months.
c subperiods, each month.
Note: Do not round intermediate calculations. Round your answers to decimal places.
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