Todays price of a non-dividend paying stock is 60 what is, Financial Management

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Todays price of a non-dividend paying stock is 60 what is

Today’s price of a non-dividend paying stock is $60. Use a two-step tree to value an American put option on the stock with a strike price of $50 that expires in 12 months. Each step is 6 months, the risk free rate is 10% per annum, and the volatility is 15%. Assume that the option is written on 100 shares of stock.

What is the option price today?

How would you hedge a position where you sell the put option today?

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Financial Management: Todays price of a non-dividend paying stock is 60 what is

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Financial Management: Todays price of a non-dividend paying stock is 60 what is

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