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1. Consider the following one-period binomial model. Assume the initial value of the stock is So. The stock price will go to either Sou

1. Consider the following one-period binomial model. Assume the initial value of the stock is So. The stock price will go to either Sou or Sod at time t = 1. Assume that the one-period simple interest rate is r such that a bond B will become Bo(1+r) at time t = 1. Assume Bo = 1. a) Suppose that d

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