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2) A Bolivia pays the stock price on the date of expiration squared, minus 300. For example, if the price of the stock at expiration
2) A Bolivia pays the stock price on the date of expiration squared, minus 300. For example, if the price of the stock at expiration is 20, a Bolivia pays 202-300=300. Note that this asset is not an option. You own a Bolivia that expires in two periods. The price of the underlying stock is 18, the interest rate is r=1/19, and the value of u is 1.14. What is the value of this asset today? 2) A Bolivia pays the stock price on the date of expiration squared, minus 300. For example, if the price of the stock at expiration is 20, a Bolivia pays 202-300=300. Note that this asset is not an option. You own a Bolivia that expires in two periods. The price of the underlying stock is 18, the interest rate is r=1/19, and the value of u is 1.14. What is the value of this asset today
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