- 3-date (0,1,2),2 period model. - Risky non-dividend paying stock that has a random return of Z=d or u each period - Riskless security with total return of (1+R) each period Specifically, prove the following equations: V(1,)V(1,)V(0)=(1+R1)E1Q[V(2)occurs]=(1+R1)E1Q[V(2)occurs]=(1+R1)2E0Q[V(2)] where E1Q[V(2) occurs ] is the conditional expectation of random CF V(2) under the riskneutral probability at date- 1 , when "up" state occurs. E1Q[V(2) occurs ] is the conditional expectation of V(2) under the risk-neutral probability at date-1, when "down" state occurs. - 3-date (0,1,2),2 period model. - Risky non-dividend paying stock that has a random return of Z=d or u each period - Riskless security with total return of (1+R) each period Specifically, prove the following equations: V(1,)V(1,)V(0)=(1+R1)E1Q[V(2)occurs]=(1+R1)E1Q[V(2)occurs]=(1+R1)2E0Q[V(2)] where E1Q[V(2) occurs ] is the conditional expectation of random CF V(2) under the riskneutral probability at date- 1 , when "up" state occurs. E1Q[V(2) occurs ] is the conditional expectation of V(2) under the risk-neutral probability at date-1, when "down" state occurs