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Compute the price of a 1 year european put option

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Use a 1 step binomial model. Compute the price of a 1 year European put option that has a strike price of $100. Suppose that the current stock price is $89 and that this stock price is expected to go up or down by 6% in a single year. Also the risk-free interest rate is at 7% which is the annual rate.

Reference no: EM132678826

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