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10.Present Value of dividend=1*.971=0.971Present Value of Stock=51-.971=50.03Price of
Stock After 1 Year=50.03*(1+6%)=53.03Exercise Price=50Price of European Put
Option=Max(0, 50-53.03)=$ 0
Solution
10.Present Value of dividend=1*.971=0.971Present Value of Stock=51-.971=50.03Price of
Stock After 1 Year=50.03*(1+6%)=53.03Exercise Price=50Price of European Put
Option=Max(0, 50-53.03)=$ 0

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10.Present Value of dividend=1.971=0.971Present Value of Stock=51-..pdf

  • 1. 10.Present Value of dividend=1*.971=0.971Present Value of Stock=51-.971=50.03Price of Stock After 1 Year=50.03*(1+6%)=53.03Exercise Price=50Price of European Put Option=Max(0, 50-53.03)=$ 0 Solution 10.Present Value of dividend=1*.971=0.971Present Value of Stock=51-.971=50.03Price of Stock After 1 Year=50.03*(1+6%)=53.03Exercise Price=50Price of European Put Option=Max(0, 50-53.03)=$ 0