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| Teaching Since: | Apr 2017 |
| Last Sign in: | 419 Weeks Ago |
| Questions Answered: | 3232 |
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MBA,MCS,M.phil
Devry University
Jan-2008 - Jan-2011
MBA,MCS,M.Phil
Devry University
Feb-2000 - Jan-2004
Regional Manager
Abercrombie & Fitch.
Mar-2005 - Nov-2010
Regional Manager
Abercrombie & Fitch.
Jan-2005 - Jan-2008
A stock price is currently $40. It is known that at the end of 3 months it will be either $45or $35. The risk-free rate of interest with quarterly compounding is 8% per annum.Calculate the value of a 3-month European put option on the stock with an exerciseprice of $40. Verify that no-arbitrage arguments and risk-neutral valuation argumentsgive the same answers.
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