Instead of the risk-neutral valuation approach

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Reference no: EM13882000

Use the replicating-portfolio approach (instead of the risk-neutral valuation approach) to find the value of a put option on $15,000 with a strike price of €10,000.

i$ = 7.1%, i€ = 5%

S0($/€) = $1.50/€1.00

S1($/€) is either $1.80/€ or $1.20/€

Reference no: EM13882000

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