Binomial tree technique, Use the binomial tree technique to

Binomial tree technique

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Reference no: EM131862971

Use the binomial tree technique to solve this problem: Price a one year American put option with strike price 45, written on a $50 stock. Use a two step tree, with 6 month time steps. Volatility is 15%. The stock will pay a dividend in 7 months time of $2. Interest rates are 3%.

Reference no: EM131862971

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