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1. Consider the following discrete time one-period market model. The savings account is $1 at time 0 and $B at time 1. The stock price
1. Consider the following discrete time one-period market model. The savings account is $1 at time 0 and $B at time 1. The stock price is given by So = 1 and S1 = $ where is a random variable taking two possible values u and d, each with positive probability. Moreover, assume that d
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