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Value today of a? one-year at-the-money european

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Reference no: EM132406963

?Eagletron's current stock price is $10. Suppose that over the current? year, the stock price will either increase by 96% or decrease by 58%. ?Also, the? risk-free rate is 25 %(EAR).

a. What is the value today of a? one-year at-the-money European put option on Eagletron? stock?

b. What is the value today of a? one-year European put option on Eagletron stock with a strike price of $ 19.60?

c. Suppose the put options in parts ?(a?) and ?(b?) could either be exercised? immediately, or in one year. What would their values be in this? case?

Reference no: EM132406963

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