Consider an 8-month put option on the sampp 500 struck at, Ask an Expert

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Consider an 8-month put option on the s&P 500 struck at K-2100. The current price is S-2050, the risk-free rate is 3%, and the dividend yield on the index is 2%. Use a four-period binomial tree (with CRR values of u and d) to price the option using a volatility of 15%. Value the option supposing it is American. Be sure to indicate when early exercise is optimal, if ever.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M93059554

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