Describe the three primary ways of incorporating dividends

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Reference no: EM131324329

How is the volatility of the underlying stock reflected in the binomial model?

Describe the three primary ways of incorporating dividends into the binomial model? Find the value of an American put option using the binomial option pricing model.

The parameters are S = 62, X = 70, r = 0.08, u = 1.10, and d = 0.95. There are no dividends. Use n =2 periods.

Reference no: EM131324329

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