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2. (40 points) Consider assets which lasts for 2 periods. Asset 1 A. In period 2, an asset has a value of 3 with probability
2. (40 points) Consider assets which lasts for 2 periods. Asset 1 A. In period 2, an asset has a value of 3 with probability 2/3 or 0 with probability 1/3. What is the expected value of the asset in period 1? B. In period 1 an option is offered. The option lets you buy the asset from part A for a price of 1 in period 2. What is the value of this option? Asset 2 C. In period 2, an asset has a value of 4 with probability 2/3 or -2 with probability 1/3. What is the expected value of the asset in period 1? D. In period 1 an option is offered. The option lets you buy the asset from part C for a price of 1 in period 2. What is the value of this option
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