Question

Consider a one-step binomial tree on stock with a current price of $200 that can go either up to $230 or down to $170 in 2 years. The stock does not pay dividend. Continuously compounding interest rate is 5%. Use the tree to compute the value of a 2-year $210-strike European call option on the stock.

Answer #1

Consider a one-step binomial tree on stock with a current price
of $200 that can go either up to $230 or down to $170 in 2 years.
The stock does not pay dividend. Continuously compounding interest
rate is 5%. Use the tree to compute the delta of a 2-year
$210-strike European call option on the stock.

Consider a one-step binomial tree on stock with a current price
of $200 that can go either up to $230 or down to $170 in 2 years.
The stock does not pay dividend. Continuously compounding interest
rate is 5%. Use the tree to compute the delta of a 2-year
$210-strike European call option on the stock.

Consider a one-step binomial tree on stock with a current price
of $200 that can go either up to $230 or down to $170 in 2 years.
The stock does not pay dividend. Continuously compounding interest
rate is 5%. Compute the payoff of a 2-year $210-strike European
call option on the stock if the stock price ends up at the $230
node of the tree in 2 years.

Consider a one-step binomial tree on stock 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 interest rates are zero. Use the
tree to compute the value of a 1-year $100-strike European put
option on the stock.

Consider a one-step binomial tree on stock 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 interest rates are zero. Use the
tree to compute the value of a 1-year $100-strike European put
option on the stock.

Consider a one-step binomial tree on stock 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 interest rates are zero. Use the
tree to compute the delta of a 1-year $100-strike European put
option on the stock.

Consider a one-step binomial tree on stock 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 interest rates are zero. Use the
tree to compute the value of a 1-year $100-strike European put
option on the stock.

Consider a one-step binomial tree on stock 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 interest rates are zero. Compute
the payoff of a 1-year $100-strike European put option on the stock
if the stock price ends up at the $115 node of the tree in 1
year.

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

1. Consider a one-step binomial tree on stock 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 interest rates are zero.
Use the tree to compute the value of a 1-year $100-strike European
put option on the stock.
2. Suppose you are long 100 contracts on a 1-year 25-put option
on AMZN. How much will your option position increase in value if...

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