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40 pts For a BAPM with N = 3, r = .1, u = 1.5, d = .9, p =q=.5, and So = 7.43, determine

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40 pts For a BAPM with N = 3, r = .1, u = 1.5, d = .9, p =q=.5, and So = 7.43, determine (a) the arbitrage free price of an Asian option with value at maturity given by VN = (Save -SN)+, with Save being the arithmetic average and payoff only at maturity (b) the replicating strategy for this Asian option

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