Waiting for answer This question has not been answered yet. You can hire a professional tutor to get the answer.
QUESTION
Set up a one-period binomial tree for a put option. Use the following information about the underlying stock price and the risk-free interest rate. What is the current value of the hedge portfolio? Do
Set up a one-period binomial tree for a put option. Use the following information about the underlying stock price and the risk-free interest rate. What is the current value of the hedge portfolio? Does it grow at a risk-free rate over time?
price=59
strike price (x)= 60
up (u)= 1.15
down (d)= .85
r= .05
