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The Current Price of a Stock Is $50

question 20

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The current price of a stock is $50. Every month, the stock price will rise by a factor of 1.2 or fall by a factor of 0.8; and a $1 risk-free investment will be worth $1.03. A dividend as a proportion 0.01 of the stock price is paid each period. What is the price of a six-month American put option at a strike of $51?


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