Indifferent between holding the put or exercising

Reference no: EM131017895

Suppose a stock price can go up by 15% or down by 13% over the next year. You own a one-year put on the stock. The interest rate is 10%, and the current stock price is $60.

a. What exercise price leaves you indifferent between holding the put or exercising it now?

Reference no: EM131017895

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Indifferent between holding the put or exercising : Suppose a stock price can go up by 15% or down by 13% over the next year. You own a one-year put on the stock. The interest rate is 10%, and the current stock price is $60. a. What exercise price leaves you indifferent between holding the put or ex..

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