sarahtjohnston58981 sarahtjohnston58981
  • 24-05-2024
  • Business
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Let S(0)=$100, r = 8% (compounded continuously), and = 0. Consider a single period binomial tree model with u = 1.3, d = 0.8 and T = 0.5.
a. Find the price of a European call option with strike price $90 using the risk-neutral pricing formula.

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