What is the value of a six-month european put option

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A stock price is currently $50. It is known that at the end of six months it will be either $46 or $54. The risk-free interest rate is 5% per annum with continuous compounding.

Problem 1: What is the value of a six-month European put option with a strike price of $48?

Problem 2: What is the value of a six-month American put option with a strike price of $48?

Reference no: EM132942254

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