Exercise 2 Calculate the European and American values
for a knock-out put option where the put option is knocked out if the stock price rises to 130 or if the stock falls to 70. Use the binomial model with the following values, S = 100; K=100; Rp = 3% T = 1 Year 12 time steps o = 20%; 2% Dividend Yield
Construct a portfolio using put or call option which give the payoff below. Allstrikes are available.
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