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Price the european call option

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A stock price is currently $50. Over each of the next two 3-month periods it is expected to go up by 6% or down by 7%. The risk-free interest rate is 5% per annum with continuous compounding . Use the binomial tree approach to find the value of a 6-month European put option with a strike price of $51. Then without using binomial trees (use any other approach ) price the European call option with the same strike and maturity.

Reference no: EM133119937

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