Question
consider a one step binomial tree with a current price of $100 that can go either...
consider a one step binomial tree with a current price of $100 that
can go either up to $115 or down to $85 in 1 year. the stock does
not pay dividend and the interest rates are zero. use the tree to
compute the value of a 1 year $100 strike european put option on
the stock
Homework Answers
Answer #1
Payoff of Put Option:
MAX of (0 and Strike price - Current Price)
Value of Put Option = $7.5 Answer
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