What is the price of one year put option on pastelle stock

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Reference no: EM131347690

The current price of Pastelle Corporation stock is $25. In each the next year, this stock price will either go up by 20% or go down by 20%. The stock pays no dividends. The one-year risk-free interest rate is 6% and will remain constant.

a. Using the Binomial Model, calculate the price of a one-year call option on Pastelle stock with a strike price of $25.

b. What is the price of a one year put option on Pastelle stock with a strike price of $25.

Reference no: EM131347690

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