You try to price the put option on xyz corp assume we live, Financial Management

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You try to price the put option on xyz corp assume we live

Option Pricing -- Risk Neutral

You try to price the put option on XYZ corp. The current stock price of XYZ is $100/share. The risk-free rate is 3%. What is the appropriate price of the 1 year put option of XYZ corp with a strike price of $110 using risk neutral approach? You project the stock price of XYZ will either be $100 or $140 in a year. Assume we live in a risk-neutral world where the returns on all assets are equal to the risk-free rate.

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Financial Management: You try to price the put option on xyz corp assume we live

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Financial Management: You try to price the put option on xyz corp assume we live

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