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10. Assume the log-normal model. The spot price is $100. The expected rate of return is 10%. The volatility is 20%. The risk-free rate is
10. Assume the log-normal model. The spot price is $100. The expected rate of return is 10%. The volatility is 20%. The risk-free rate is 3%. A "power derivative pays you the square of the underlying asset price in 4 months. Calculate its A and I today. 10. Assume the log-normal model. The spot price is $100. The expected rate of return is 10%. The volatility is 20%. The risk-free rate is 3%. A "power derivative pays you the square of the underlying asset price in 4 months. Calculate its A and I today
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