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T risk-free rate is 4 percent assume a two-period world

Consider a binomial world in which the current stock price of 100 can either go up by 10 percent or down by 10 percent. The risk-free rate is 4 percent. Assume a two-period world. What is the theoretical value of the American put with an exercise price of 105?

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Finance Basics: T risk-free rate is 4 percent assume a two-period world

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