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1. An Asian option is a European type of derivative, hence it can be priced using a binomial tree.True False 2. A three-step binomial tree,

1. An Asian option is a European type of derivative, hence it can be priced using a binomial tree.True False

2. A three-step binomial tree, with terminal stock prices X1>X2>X3>X4. At time 0, if you have insider information that at the maturity the stock price will be X3. Then, Down-up-up is not a possible sample path.

True False

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