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A stock index is currently 1,500. Its volatility is 18%. The risk-free rate is 4% per

Options, Futures, and Other Derivatives | 9th Edition | ISBN: 9780133456318 | Authors: John C. Hull ISBN: 9780133456318 458

Solution for problem 13.17 Chapter 13

Options, Futures, and Other Derivatives | 9th Edition

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Options, Futures, and Other Derivatives | 9th Edition | ISBN: 9780133456318 | Authors: John C. Hull

Options, Futures, and Other Derivatives | 9th Edition

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Problem 13.17

A stock index is currently 1,500. Its volatility is 18%. The risk-free rate is 4% per annum (continuously compounded) for all maturities and the dividend yield on the index is 2.5%. Calculate values for u, d, and p when a 6-month time step is used. What is the value a 12-month American put option with a strike price of 1,480 given by a two-step binomial tree.

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Business Law 205 February 15, 2016- February 24, 2016 Alternative Dispute Resolution (ADR) *QUICK AND EFFICIENT 1. Arbitration- Issues an award, found in contracts- BINDING a. Single arbitrator (the norm) - another person of significance acts as the judge (i.e. an architect acts as the judge for a building dispute) b. Arbitrator panel (3 arbitrators) – 3 people of significance act as the judge- will usually result in a better verdict 2. Mediation- voluntary- NON BINDING a. Resolve dispute- when two parties agree, it is binding b. Mini trial- a retired judge will run the trial a promise given in Unilater A promise in Bilateral exchange for a

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Textbook: Options, Futures, and Other Derivatives
Edition: 9
Author: John C. Hull
ISBN: 9780133456318

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A stock index is currently 1,500. Its volatility is 18%. The risk-free rate is 4% per