Multiple Choice
The stock price of Bravo Corp. is currently $100. The stock price a year from now will be either $160 or $60 with equal probabilities. The interest rate at which investors invest in riskless assets is 6%. Using the binomial OPM, the value of a put option with an exercise price of $135 and an expiration date 1 year from now should be worth ________ today.
A) $34.09
B) $37.50
C) $38.21
D) $45.45
Correct Answer:
Verified
Correct Answer:
Verified
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