Exercise 17.2.2 The trinomial model no longer supports perfect replication of options with stocks and bonds as

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Exercise 17.2.2 The trinomial model no longer supports perfect replication of options with stocks and bonds as in the binomial model. Replicating an option with h shares of stock and $B in bonds involves two unknowns h and B, but the three branches imply three conditions. Give an example for which resulting system of three equations in two knowns is inconsistent.

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