Waiting for answer This question has not been answered yet. You can hire a professional tutor to get the answer.
QUESTION
The current price of a non-dividend paying stock is $50, volatility 20% and the continually compounding risk-free rate 5%.
The current price of a non-dividend paying stock is $50, volatility 20% and the continually compounding risk-free rate 5%. Use a two-step tree with 6-month steps to value a) A European put option on the stock with a strike price of $48 that expires in 12 months b) An American put option with the same strike and expiration.
