Solutions to Assignment 5

The stock price today is $100, At the end of the year, stock price will be either $130 or $80. If the stock price increase to $130, put option will not be exercised so payoff =0. If the stock price decreases to $80, put option will pay $30 (i.e. buy the stock in the open market for $80 and exercise the put option to sell the stock for X=110) ................
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