Bob priced an American put option on a tree and obtained the result of 2.53. Pri...
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Bob priced an American put option on a tree and obtained the result of 2.53.
Pricing a European put option with the same parameters gave him 2.14 using the same tree (i.e., the tree build using the same parameters) and 2.18 using the Black-Schole formula.
Use the control variate technique to improve the price of the American put. In your answer give the improved price.
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