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Question: Buffelhead's stock price is $220 and could halve or double in each six-month period. Assume that you own a one-year American put option on Buffelhead stock with an exercise price of $220. The interest rate is 21% a year.

b. Calculate the value of the Buffelhead American put. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Value of put $

c. Calculate the value of the put if it had been European-style. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Value of put $

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M92787552

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