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Walmart stock is currently trading at $57/share. Assume that its value in exactly one year is...

Walmart stock is currently trading at $57/share. Assume that its value in exactly one year is a random variable with the probability mass function given below. What is the fair premium for a one-year put option on Walmart stock with a strike price of $52?

Price $42 $48 $51 $54 $63
Probability 0.1 0.2 0.1 0.2 0.4
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Answer #1

E :put option exercised

N.E. :put option no exercisedStrike Price = $52, Term = 1year: (A) TAXB) tock Price (expected) E/N.E Probability 0ol pay x Probabity 42 payoff ($) at 10 (

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