Construct a three- step binomial tree to calculate a price, Ask an Expert

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Construct a three- step binomial tree to calculate a price for a 3-month put option on an asset at a strike of 101. The current price is 100. At each step, the price either rises of falls by a factor of 2% (that is, either multiplied by 1.02 or divided by 1.02). The risk-free interest rate is 12% per annum.

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Financial Management, Finance

Category:- Financial Management
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