Exercise 17.1.13 In formula (17.6), the barrier H is replaced with the effective barrier H, which is

Question:

Exercise 17.1.13 In formula (17.6), the barrier H is replaced with the effective barrier ˜H, which is one of the n+1 terminal prices. If the effective barrier is allowed to be one of all possible 2n+1 prices Sun, Sun−1, . . . , Su−n, what changes should be made to formulas (17.6) and (17.7)?

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