Compute price of european put option that expires in a year

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Reference no: EM131558520

Suppose the current stock price is $120 and the stock price in a year can be either $150 or $100. The risk-free rate is 2% per year, compounded annually. Compute the price of a European put option that expires in a year. The strike price is K =$130. Type your answer without $ as a numerical value and round the number to the nearest basis point. For example, type 34.27 if you think the answer is $34, 265.

Reference no: EM131558520

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