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2. Consider the following discrete time two-period market model. The savings account is given by B: = Bt for t = 0,1, 2. The stock

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2. Consider the following discrete time two-period market model. The savings account is given by B: = Bt for t = 0,1, 2. The stock price is given by So = 1, S1 = {1 and S2 = $1$2 where &i and 2 are independent random variables, each taking two possible values u and d with positive probabilities. Moreover, assume that 0

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