Exercise 9.2.2 Consider two securities,Aand B. In a period, securityAs price can go from $100 to either

Question:

Exercise 9.2.2 Consider two securities,Aand B. In a period, securityA’s price can go from $100 to either

(a) $160 or

(b) $80, whereas security B’s price can move to

$50 in case

(a) or $60 in case (b). Price security B when the interest rate per period is 10%.

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