Construct a three- step binomial tree to calculate a price


Construct a three- step binomial tree to calculate a price for a 3-month put option on an asset at a strike of 101. The current price is 100. At each step, the price either rises of falls by a factor of 2% (that is, either multiplied by 1.02 or divided by 1.02). The risk-free interest rate is 12% per annum.

Request for Solution File

Ask an Expert for Answer!!
Financial Management: Construct a three- step binomial tree to calculate a price
Reference No:- TGS01725680

Expected delivery within 24 Hours