SlideShare a Scribd company logo
1 of 1
Download to read offline
Consider a one-period binomial model with h = 1, where S = $100, r = 0 = 30%, and = 0.08.
Compute American put option prices tor K = $100, $110.
$120, and $130. What is the lowest strike price (if there is one) at which early exercise will occur?
If early exercise never occurs, explain why not.

More Related Content

More from aarokyaaqua

How to fix this error- Exception in thread -main- q- Exit java-lang-.pdf
How to fix this error-   Exception in thread -main- q- Exit java-lang-.pdfHow to fix this error-   Exception in thread -main- q- Exit java-lang-.pdf
How to fix this error- Exception in thread -main- q- Exit java-lang-.pdfaarokyaaqua
 
Anatomy and Physiology 1- The epidermis is the most superficial layer.pdf
Anatomy and Physiology 1- The epidermis is the most superficial layer.pdfAnatomy and Physiology 1- The epidermis is the most superficial layer.pdf
Anatomy and Physiology 1- The epidermis is the most superficial layer.pdfaarokyaaqua
 
A- Collect Bitcoin price data (monthly)- calculate monthly returns- Co.pdf
A- Collect Bitcoin price data (monthly)- calculate monthly returns- Co.pdfA- Collect Bitcoin price data (monthly)- calculate monthly returns- Co.pdf
A- Collect Bitcoin price data (monthly)- calculate monthly returns- Co.pdfaarokyaaqua
 
e geyser Old Faithful in Yellowstone National Park alternates periods.pdf
e geyser Old Faithful in Yellowstone National Park alternates periods.pdfe geyser Old Faithful in Yellowstone National Park alternates periods.pdf
e geyser Old Faithful in Yellowstone National Park alternates periods.pdfaarokyaaqua
 
A financial analyst is interested in estimating the proportion of publ.pdf
A financial analyst is interested in estimating the proportion of publ.pdfA financial analyst is interested in estimating the proportion of publ.pdf
A financial analyst is interested in estimating the proportion of publ.pdfaarokyaaqua
 
8- In a study of helicopter usage and patient survival- among the 42-3.pdf
8- In a study of helicopter usage and patient survival- among the 42-3.pdf8- In a study of helicopter usage and patient survival- among the 42-3.pdf
8- In a study of helicopter usage and patient survival- among the 42-3.pdfaarokyaaqua
 
Define the following terms- and explain it in your own words with exam.pdf
Define the following terms- and explain it in your own words with exam.pdfDefine the following terms- and explain it in your own words with exam.pdf
Define the following terms- and explain it in your own words with exam.pdfaarokyaaqua
 
Complete the following tables- UnitAbbreviationdpsdpmcurie millicu.pdf
Complete the following tables-   UnitAbbreviationdpsdpmcurie   millicu.pdfComplete the following tables-   UnitAbbreviationdpsdpmcurie   millicu.pdf
Complete the following tables- UnitAbbreviationdpsdpmcurie millicu.pdfaarokyaaqua
 
2- Identify in the statement of position the assets and liabilities se (1).pdf
2- Identify in the statement of position the assets and liabilities se (1).pdf2- Identify in the statement of position the assets and liabilities se (1).pdf
2- Identify in the statement of position the assets and liabilities se (1).pdfaarokyaaqua
 
1-3 (4 points) L is the language over the alphabet {a-b-c} given by L-.pdf
1-3 (4 points) L is the language over the alphabet {a-b-c} given by L-.pdf1-3 (4 points) L is the language over the alphabet {a-b-c} given by L-.pdf
1-3 (4 points) L is the language over the alphabet {a-b-c} given by L-.pdfaarokyaaqua
 
vijay ananth has just been hired as the cio at wilshire fina.pdf
vijay ananth has just been hired as the cio at wilshire fina.pdfvijay ananth has just been hired as the cio at wilshire fina.pdf
vijay ananth has just been hired as the cio at wilshire fina.pdfaarokyaaqua
 
Which of the Android lifecycle methods is called when the ac.pdf
Which of the Android lifecycle methods is called when the ac.pdfWhich of the Android lifecycle methods is called when the ac.pdf
Which of the Android lifecycle methods is called when the ac.pdfaarokyaaqua
 
Using the original tables below if a DBMS is using an DELET.pdf
Using the original tables below if a DBMS is using an DELET.pdfUsing the original tables below if a DBMS is using an DELET.pdf
Using the original tables below if a DBMS is using an DELET.pdfaarokyaaqua
 
The mean amount of money spent on lunch per week for a sampl.pdf
The mean amount of money spent on lunch per week for a sampl.pdfThe mean amount of money spent on lunch per week for a sampl.pdf
The mean amount of money spent on lunch per week for a sampl.pdfaarokyaaqua
 
Temel Bilgiler zerine Apple Inc C Stratejik ynetimin .pdf
Temel Bilgiler zerine  Apple Inc  C Stratejik ynetimin .pdfTemel Bilgiler zerine  Apple Inc  C Stratejik ynetimin .pdf
Temel Bilgiler zerine Apple Inc C Stratejik ynetimin .pdfaarokyaaqua
 
The following information pertains to the Bank of Moncton A.pdf
The following information pertains to the Bank of Moncton A.pdfThe following information pertains to the Bank of Moncton A.pdf
The following information pertains to the Bank of Moncton A.pdfaarokyaaqua
 
Subject Public Relations Topic Search some of the informat.pdf
Subject Public Relations Topic Search some of the informat.pdfSubject Public Relations Topic Search some of the informat.pdf
Subject Public Relations Topic Search some of the informat.pdfaarokyaaqua
 
Seventeen people have been exposed to a particular disease .pdf
Seventeen people have been exposed to a particular disease .pdfSeventeen people have been exposed to a particular disease .pdf
Seventeen people have been exposed to a particular disease .pdfaarokyaaqua
 
Select the two nonsilicate mineral classes that form from pr.pdf
Select the two nonsilicate mineral classes that form from pr.pdfSelect the two nonsilicate mineral classes that form from pr.pdf
Select the two nonsilicate mineral classes that form from pr.pdfaarokyaaqua
 
Social media Artificial Intelligence AI IoT Augmented .pdf
Social media Artificial Intelligence AI IoT Augmented .pdfSocial media Artificial Intelligence AI IoT Augmented .pdf
Social media Artificial Intelligence AI IoT Augmented .pdfaarokyaaqua
 

More from aarokyaaqua (20)

How to fix this error- Exception in thread -main- q- Exit java-lang-.pdf
How to fix this error-   Exception in thread -main- q- Exit java-lang-.pdfHow to fix this error-   Exception in thread -main- q- Exit java-lang-.pdf
How to fix this error- Exception in thread -main- q- Exit java-lang-.pdf
 
Anatomy and Physiology 1- The epidermis is the most superficial layer.pdf
Anatomy and Physiology 1- The epidermis is the most superficial layer.pdfAnatomy and Physiology 1- The epidermis is the most superficial layer.pdf
Anatomy and Physiology 1- The epidermis is the most superficial layer.pdf
 
A- Collect Bitcoin price data (monthly)- calculate monthly returns- Co.pdf
A- Collect Bitcoin price data (monthly)- calculate monthly returns- Co.pdfA- Collect Bitcoin price data (monthly)- calculate monthly returns- Co.pdf
A- Collect Bitcoin price data (monthly)- calculate monthly returns- Co.pdf
 
e geyser Old Faithful in Yellowstone National Park alternates periods.pdf
e geyser Old Faithful in Yellowstone National Park alternates periods.pdfe geyser Old Faithful in Yellowstone National Park alternates periods.pdf
e geyser Old Faithful in Yellowstone National Park alternates periods.pdf
 
A financial analyst is interested in estimating the proportion of publ.pdf
A financial analyst is interested in estimating the proportion of publ.pdfA financial analyst is interested in estimating the proportion of publ.pdf
A financial analyst is interested in estimating the proportion of publ.pdf
 
8- In a study of helicopter usage and patient survival- among the 42-3.pdf
8- In a study of helicopter usage and patient survival- among the 42-3.pdf8- In a study of helicopter usage and patient survival- among the 42-3.pdf
8- In a study of helicopter usage and patient survival- among the 42-3.pdf
 
Define the following terms- and explain it in your own words with exam.pdf
Define the following terms- and explain it in your own words with exam.pdfDefine the following terms- and explain it in your own words with exam.pdf
Define the following terms- and explain it in your own words with exam.pdf
 
Complete the following tables- UnitAbbreviationdpsdpmcurie millicu.pdf
Complete the following tables-   UnitAbbreviationdpsdpmcurie   millicu.pdfComplete the following tables-   UnitAbbreviationdpsdpmcurie   millicu.pdf
Complete the following tables- UnitAbbreviationdpsdpmcurie millicu.pdf
 
2- Identify in the statement of position the assets and liabilities se (1).pdf
2- Identify in the statement of position the assets and liabilities se (1).pdf2- Identify in the statement of position the assets and liabilities se (1).pdf
2- Identify in the statement of position the assets and liabilities se (1).pdf
 
1-3 (4 points) L is the language over the alphabet {a-b-c} given by L-.pdf
1-3 (4 points) L is the language over the alphabet {a-b-c} given by L-.pdf1-3 (4 points) L is the language over the alphabet {a-b-c} given by L-.pdf
1-3 (4 points) L is the language over the alphabet {a-b-c} given by L-.pdf
 
vijay ananth has just been hired as the cio at wilshire fina.pdf
vijay ananth has just been hired as the cio at wilshire fina.pdfvijay ananth has just been hired as the cio at wilshire fina.pdf
vijay ananth has just been hired as the cio at wilshire fina.pdf
 
Which of the Android lifecycle methods is called when the ac.pdf
Which of the Android lifecycle methods is called when the ac.pdfWhich of the Android lifecycle methods is called when the ac.pdf
Which of the Android lifecycle methods is called when the ac.pdf
 
Using the original tables below if a DBMS is using an DELET.pdf
Using the original tables below if a DBMS is using an DELET.pdfUsing the original tables below if a DBMS is using an DELET.pdf
Using the original tables below if a DBMS is using an DELET.pdf
 
The mean amount of money spent on lunch per week for a sampl.pdf
The mean amount of money spent on lunch per week for a sampl.pdfThe mean amount of money spent on lunch per week for a sampl.pdf
The mean amount of money spent on lunch per week for a sampl.pdf
 
Temel Bilgiler zerine Apple Inc C Stratejik ynetimin .pdf
Temel Bilgiler zerine  Apple Inc  C Stratejik ynetimin .pdfTemel Bilgiler zerine  Apple Inc  C Stratejik ynetimin .pdf
Temel Bilgiler zerine Apple Inc C Stratejik ynetimin .pdf
 
The following information pertains to the Bank of Moncton A.pdf
The following information pertains to the Bank of Moncton A.pdfThe following information pertains to the Bank of Moncton A.pdf
The following information pertains to the Bank of Moncton A.pdf
 
Subject Public Relations Topic Search some of the informat.pdf
Subject Public Relations Topic Search some of the informat.pdfSubject Public Relations Topic Search some of the informat.pdf
Subject Public Relations Topic Search some of the informat.pdf
 
Seventeen people have been exposed to a particular disease .pdf
Seventeen people have been exposed to a particular disease .pdfSeventeen people have been exposed to a particular disease .pdf
Seventeen people have been exposed to a particular disease .pdf
 
Select the two nonsilicate mineral classes that form from pr.pdf
Select the two nonsilicate mineral classes that form from pr.pdfSelect the two nonsilicate mineral classes that form from pr.pdf
Select the two nonsilicate mineral classes that form from pr.pdf
 
Social media Artificial Intelligence AI IoT Augmented .pdf
Social media Artificial Intelligence AI IoT Augmented .pdfSocial media Artificial Intelligence AI IoT Augmented .pdf
Social media Artificial Intelligence AI IoT Augmented .pdf
 

Recently uploaded

Play hard learn harder: The Serious Business of Play
Play hard learn harder:  The Serious Business of PlayPlay hard learn harder:  The Serious Business of Play
Play hard learn harder: The Serious Business of PlayPooky Knightsmith
 
Spellings Wk 4 and Wk 5 for Grade 4 at CAPS
Spellings Wk 4 and Wk 5 for Grade 4 at CAPSSpellings Wk 4 and Wk 5 for Grade 4 at CAPS
Spellings Wk 4 and Wk 5 for Grade 4 at CAPSAnaAcapella
 
When Quality Assurance Meets Innovation in Higher Education - Report launch w...
When Quality Assurance Meets Innovation in Higher Education - Report launch w...When Quality Assurance Meets Innovation in Higher Education - Report launch w...
When Quality Assurance Meets Innovation in Higher Education - Report launch w...Gary Wood
 
dusjagr & nano talk on open tools for agriculture research and learning
dusjagr & nano talk on open tools for agriculture research and learningdusjagr & nano talk on open tools for agriculture research and learning
dusjagr & nano talk on open tools for agriculture research and learningMarc Dusseiller Dusjagr
 
OSCM Unit 2_Operations Processes & Systems
OSCM Unit 2_Operations Processes & SystemsOSCM Unit 2_Operations Processes & Systems
OSCM Unit 2_Operations Processes & SystemsSandeep D Chaudhary
 
How to setup Pycharm environment for Odoo 17.pptx
How to setup Pycharm environment for Odoo 17.pptxHow to setup Pycharm environment for Odoo 17.pptx
How to setup Pycharm environment for Odoo 17.pptxCeline George
 
Unit 3 Emotional Intelligence and Spiritual Intelligence.pdf
Unit 3 Emotional Intelligence and Spiritual Intelligence.pdfUnit 3 Emotional Intelligence and Spiritual Intelligence.pdf
Unit 3 Emotional Intelligence and Spiritual Intelligence.pdfDr Vijay Vishwakarma
 
Wellbeing inclusion and digital dystopias.pptx
Wellbeing inclusion and digital dystopias.pptxWellbeing inclusion and digital dystopias.pptx
Wellbeing inclusion and digital dystopias.pptxJisc
 
FICTIONAL SALESMAN/SALESMAN SNSW 2024.pdf
FICTIONAL SALESMAN/SALESMAN SNSW 2024.pdfFICTIONAL SALESMAN/SALESMAN SNSW 2024.pdf
FICTIONAL SALESMAN/SALESMAN SNSW 2024.pdfPondicherry University
 
SPLICE Working Group: Reusable Code Examples
SPLICE Working Group:Reusable Code ExamplesSPLICE Working Group:Reusable Code Examples
SPLICE Working Group: Reusable Code ExamplesPeter Brusilovsky
 
diagnosting testing bsc 2nd sem.pptx....
diagnosting testing bsc 2nd sem.pptx....diagnosting testing bsc 2nd sem.pptx....
diagnosting testing bsc 2nd sem.pptx....Ritu480198
 
HMCS Max Bernays Pre-Deployment Brief (May 2024).pptx
HMCS Max Bernays Pre-Deployment Brief (May 2024).pptxHMCS Max Bernays Pre-Deployment Brief (May 2024).pptx
HMCS Max Bernays Pre-Deployment Brief (May 2024).pptxEsquimalt MFRC
 
Diuretic, Hypoglycemic and Limit test of Heavy metals and Arsenic.-1.pdf
Diuretic, Hypoglycemic and Limit test of Heavy metals and Arsenic.-1.pdfDiuretic, Hypoglycemic and Limit test of Heavy metals and Arsenic.-1.pdf
Diuretic, Hypoglycemic and Limit test of Heavy metals and Arsenic.-1.pdfKartik Tiwari
 
AIM of Education-Teachers Training-2024.ppt
AIM of Education-Teachers Training-2024.pptAIM of Education-Teachers Training-2024.ppt
AIM of Education-Teachers Training-2024.pptNishitharanjan Rout
 
Michaelis Menten Equation and Estimation Of Vmax and Tmax.pptx
Michaelis Menten Equation and Estimation Of Vmax and Tmax.pptxMichaelis Menten Equation and Estimation Of Vmax and Tmax.pptx
Michaelis Menten Equation and Estimation Of Vmax and Tmax.pptxRugvedSathawane
 
Andreas Schleicher presents at the launch of What does child empowerment mean...
Andreas Schleicher presents at the launch of What does child empowerment mean...Andreas Schleicher presents at the launch of What does child empowerment mean...
Andreas Schleicher presents at the launch of What does child empowerment mean...EduSkills OECD
 
How to Manage Call for Tendor in Odoo 17
How to Manage Call for Tendor in Odoo 17How to Manage Call for Tendor in Odoo 17
How to Manage Call for Tendor in Odoo 17Celine George
 
Graduate Outcomes Presentation Slides - English
Graduate Outcomes Presentation Slides - EnglishGraduate Outcomes Presentation Slides - English
Graduate Outcomes Presentation Slides - Englishneillewis46
 

Recently uploaded (20)

Play hard learn harder: The Serious Business of Play
Play hard learn harder:  The Serious Business of PlayPlay hard learn harder:  The Serious Business of Play
Play hard learn harder: The Serious Business of Play
 
Spellings Wk 4 and Wk 5 for Grade 4 at CAPS
Spellings Wk 4 and Wk 5 for Grade 4 at CAPSSpellings Wk 4 and Wk 5 for Grade 4 at CAPS
Spellings Wk 4 and Wk 5 for Grade 4 at CAPS
 
When Quality Assurance Meets Innovation in Higher Education - Report launch w...
When Quality Assurance Meets Innovation in Higher Education - Report launch w...When Quality Assurance Meets Innovation in Higher Education - Report launch w...
When Quality Assurance Meets Innovation in Higher Education - Report launch w...
 
dusjagr & nano talk on open tools for agriculture research and learning
dusjagr & nano talk on open tools for agriculture research and learningdusjagr & nano talk on open tools for agriculture research and learning
dusjagr & nano talk on open tools for agriculture research and learning
 
OSCM Unit 2_Operations Processes & Systems
OSCM Unit 2_Operations Processes & SystemsOSCM Unit 2_Operations Processes & Systems
OSCM Unit 2_Operations Processes & Systems
 
How to setup Pycharm environment for Odoo 17.pptx
How to setup Pycharm environment for Odoo 17.pptxHow to setup Pycharm environment for Odoo 17.pptx
How to setup Pycharm environment for Odoo 17.pptx
 
VAMOS CUIDAR DO NOSSO PLANETA! .
VAMOS CUIDAR DO NOSSO PLANETA!                    .VAMOS CUIDAR DO NOSSO PLANETA!                    .
VAMOS CUIDAR DO NOSSO PLANETA! .
 
Unit 3 Emotional Intelligence and Spiritual Intelligence.pdf
Unit 3 Emotional Intelligence and Spiritual Intelligence.pdfUnit 3 Emotional Intelligence and Spiritual Intelligence.pdf
Unit 3 Emotional Intelligence and Spiritual Intelligence.pdf
 
Wellbeing inclusion and digital dystopias.pptx
Wellbeing inclusion and digital dystopias.pptxWellbeing inclusion and digital dystopias.pptx
Wellbeing inclusion and digital dystopias.pptx
 
FICTIONAL SALESMAN/SALESMAN SNSW 2024.pdf
FICTIONAL SALESMAN/SALESMAN SNSW 2024.pdfFICTIONAL SALESMAN/SALESMAN SNSW 2024.pdf
FICTIONAL SALESMAN/SALESMAN SNSW 2024.pdf
 
SPLICE Working Group: Reusable Code Examples
SPLICE Working Group:Reusable Code ExamplesSPLICE Working Group:Reusable Code Examples
SPLICE Working Group: Reusable Code Examples
 
diagnosting testing bsc 2nd sem.pptx....
diagnosting testing bsc 2nd sem.pptx....diagnosting testing bsc 2nd sem.pptx....
diagnosting testing bsc 2nd sem.pptx....
 
HMCS Max Bernays Pre-Deployment Brief (May 2024).pptx
HMCS Max Bernays Pre-Deployment Brief (May 2024).pptxHMCS Max Bernays Pre-Deployment Brief (May 2024).pptx
HMCS Max Bernays Pre-Deployment Brief (May 2024).pptx
 
Diuretic, Hypoglycemic and Limit test of Heavy metals and Arsenic.-1.pdf
Diuretic, Hypoglycemic and Limit test of Heavy metals and Arsenic.-1.pdfDiuretic, Hypoglycemic and Limit test of Heavy metals and Arsenic.-1.pdf
Diuretic, Hypoglycemic and Limit test of Heavy metals and Arsenic.-1.pdf
 
Including Mental Health Support in Project Delivery, 14 May.pdf
Including Mental Health Support in Project Delivery, 14 May.pdfIncluding Mental Health Support in Project Delivery, 14 May.pdf
Including Mental Health Support in Project Delivery, 14 May.pdf
 
AIM of Education-Teachers Training-2024.ppt
AIM of Education-Teachers Training-2024.pptAIM of Education-Teachers Training-2024.ppt
AIM of Education-Teachers Training-2024.ppt
 
Michaelis Menten Equation and Estimation Of Vmax and Tmax.pptx
Michaelis Menten Equation and Estimation Of Vmax and Tmax.pptxMichaelis Menten Equation and Estimation Of Vmax and Tmax.pptx
Michaelis Menten Equation and Estimation Of Vmax and Tmax.pptx
 
Andreas Schleicher presents at the launch of What does child empowerment mean...
Andreas Schleicher presents at the launch of What does child empowerment mean...Andreas Schleicher presents at the launch of What does child empowerment mean...
Andreas Schleicher presents at the launch of What does child empowerment mean...
 
How to Manage Call for Tendor in Odoo 17
How to Manage Call for Tendor in Odoo 17How to Manage Call for Tendor in Odoo 17
How to Manage Call for Tendor in Odoo 17
 
Graduate Outcomes Presentation Slides - English
Graduate Outcomes Presentation Slides - EnglishGraduate Outcomes Presentation Slides - English
Graduate Outcomes Presentation Slides - English
 

Consider a oneperiod binomial model with h 1 where S .pdf

  • 1. Consider a one-period binomial model with h = 1, where S = $100, r = 0 = 30%, and = 0.08. Compute American put option prices tor K = $100, $110. $120, and $130. What is the lowest strike price (if there is one) at which early exercise will occur? If early exercise never occurs, explain why not.