The current price of a non-dividend-paying stock is 40 the, Financial Management

The current price of a non-dividend-paying stock is 40 the

The current price of a non-dividend-paying stock is $40. Over the next year it is expected to rise to $42 or fall to $37. An investor buys put options with a strike price of $41. what is the value of each option? The risk-free interest rate is 2% per annum with continuous compounding! The formula for the risk neutral probability of an up movement.

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Financial Management: The current price of a non-dividend-paying stock is 40 the

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Financial Management: The current price of a non-dividend-paying stock is 40 the

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