Price the following double knockout option: the option has barriers at levels S u and S d
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Price the following double knockout option: the option has barriers at levels Su and Sd, above and below the initial asset price, respectively. The option has payoff $1, unless the asset touches either barrier before expiry, in which case the option knocks out and has no payoff.
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The price of the double knockout option will depend on the volatility ...View the full answer
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