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What should be this american put option price

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Reference no: EM132421986

Problem: Current price of a non-dividend paying stock is $50. Use a two-step tree to value an AMERICAN PUT option on the stock with a strike price of $52 that expires in 6 months. Each step is 3 months and in each step the stock price either moves up by 10% or moves down by 10%. Suppose that the risk-free rate is 7% per anum continuous compounding. What should be this American put option price? Please answer the following question.

Reference no: EM132421986

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