What is the price if the option is european

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Reference no: EM131243426

Price an IBM put option with a strike price of $100, using the parameters of the example in the text: t = 0.1333, r_F = 1.77%, σ = 30%, S₀ = $80.50.

(a) What is the price if the option is European?

(b) What is the price if the option is American? Would you continue holding onto it.

Reference no: EM131243426

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