Given the representation: Can you determine the g(-) if the M T (X T ) is the
Question:
Given the representation:
Can you determine the g(-) if the MT(XT) is the payoff of an plain vanilla European call option at expiration?
That is, if MT(XT) is given by:
MT(XT) = max [XT?? K, 0],
Where 0
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In theory the representation is possible The difficulty is that X t S t may not be a martingale u...View the full answer
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