What is the stock holding

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Question - A stock price is currently trading at $75. Over the one periods the stock will be with up 12% or down 5%. The risk-free interest rate is 4% per annum with continous compounding. The maturity is T = 2.

What is the value of a 12 month European put option with a strike price of $80 at each point in the tree?

What is the stock holding, x(n) and month market holding y(n) at each point in the tree?

Reference no: EM132184008

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