Compute if the dividend on the CD is 0 and the payoff is $1300 max(0, 1300 S5 5) max(0, S5 5 2600) and the initial price is to be $1300 ...

The 2600strike call has a valu ...

Compute if the dividend on the CD is 0 and the payoff is $1300 max(0,

Question:

Compute λ if the on the CD is 0 and the payoff is $1300 − max(0, 1300 − S5.5) + λ × max(0, S5.5 − 2600) and the initial price is to be $1300.
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...