A stock index currently stands at 300 and has a volatility, Ask an Expert

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A stock index currently stands at 300 and has a volatility of 20%. The risk-free interest rate is 8% and the dividend yield on the index is 3%. Use a three-step binomial tree to evaluate a six-month put option on the index with a strike price of 300 if it is (a) European and (b) American?

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Financial Management, Finance

Category:- Financial Management
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