Logo
Home Study Material Contact Search
AI Chat FREE
  1. mathematics
  2. basic math
  3. a. ? = 0.4, r = 0.1, ?t = 1/52, s0 = 40. construct

A. ? = 0.4, r = 0.1, ?t = 1/52, S0 = 40. Construct a binomial tree with...

90.2K

Verified Solution

Question

Basic Math


A. ? =0.4, r = 0.1,
?t =1/52, S0 = 40. Construct a binomial tree with three periods (i.e.,periods 0,1 and 2. Assume that each time period is one week.)[Answer with two decimal points! i.e., 40.36]

B.Price a two week European Put option with a 41 strike by hand

Answer & Explanation Solved by verified expert
4.5 Ratings (736 Votes)
Given that S040 K41 r010 T 2 weeks 003846years n2Volatility 040Now u e x sqrtt where t T 0038462 001923 e040 xsqrt001923 10570Similarly d 1u 110570 09460Also a er x t e010x 001923 10019p ad ud 1001909460105700946000559 01110050351p 105035    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Chemistry
1.2K views

Calculate the pH at the equivalence point for the following titration: 0.10 M HCOOH versus 0.10...

Biology
1.2K views

Lysozyme is an enzyme produced by humans that also targets peptidoglycan. Does it have the same...

Mechanical Engineering
1.2K views

A compound tube is formed by shrinking together two tubes with common radius 150 mm and...

Physics
1.2K views

Max m SECTION 1 Answer all questions max marks 20 assume g 10 m s...

Basic Math
1.2K views

Bentley invested $26,000 in an account paying an interest rate of 6.8% compounded daily. Assuming...

Algebra
1.2K views

Country A has an exponential growth rate of 4 49 per year The population is...

Accounting
1.2K views

You have been asked to prepare a December cash budget for Ashton Company, a distributor...

Accounting
1.2K views

Zhao Company has fixed costs of $354,000. Its single product sells for $175 per unit,...

Accounting
1.2K views

Will thumbs up Sophia's Restaurant served 6,200 meals last quarter. Sophia recorded the...

Accounting
1.2K views

Financial statements needed to answer the questions in picture 1 are on the second picture...

Accounting
1.2K views

Burning Lotus, Inc., a merchandiser of earth centric products, began operations on January 1. The...

Accounting
1.2K views

The course is Accounting theory. What are the major disciplines that have influenced the...