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You are attempting to value a put option with an exercise price of $106 and one...

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Finance

You are attempting to value a put option with an exercise priceof $106 and one year to expiration. The underlying stock pays nodividends, its current price is $106, and you believe it has a 50%chance of increasing to $125 and a 50% chance of decreasing to $87.The risk-free rate of interest is 8%. Calculate the value of a putoption with exercise price $106. (Do not round intermediatecalculations. Round your answer to 2 decimalplaces.)

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Twostate put option S 106 X106 1r 108 The stock price today is 106 At the end of the year stock price will be either 125 or 87 If the stock price increase    See Answer
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You are attempting to value a put option with an exercise priceof $106 and one year to expiration. The underlying stock pays nodividends, its current price is $106, and you believe it has a 50%chance of increasing to $125 and a 50% chance of decreasing to $87.The risk-free rate of interest is 8%. Calculate the value of a putoption with exercise price $106. (Do not round intermediatecalculations. Round your answer to 2 decimalplaces.)

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