Consider a 1-year European and a 1-year American put option. both with exercise price of...

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Finance

Consider a 1-year European and a 1-year American put option. both with exercise price of 75 on an underlying stock with price 73 and stock price volatility of 15%.

  1. (a) Determine the value of the European put option and American put option using a two step binomial tree.

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