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(a) Consider the Black-Scholes equation for the option price V(S,t) if the underlying does not pay out dividends. = (i) Show that V(S,t) = AS,

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(a) Consider the Black-Scholes equation for the option price V(S,t) if the underlying does not pay out dividends. = (i) Show that V(S,t) = AS, where S is the underlying price, t is time, and A is a constant, is a solution to the Black-Scholes equation. (ii) For the solution V(S,t) = AS, define the value A used for hedging. =

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