Question: Use risk neutral valuation to value a PUT option on 10,000 with a strike price of 12500. 0(/) = 0.80/, = 15% and = 5%

Use risk neutral valuation to value a PUT option on 10,000 with a strike price of 12500. 0(/) = 0.80/, = 15% and = 5% In the next year, there are two possibilities: 1(/) = 1.00/ or 1(/) = 0.75/

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