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A financial institution plans to offer a security that pays off a dollar amount equal to Inst at time T. 1. Use risk-neutral valuation to

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A financial institution plans to offer a security that pays off a dollar amount equal to Inst at time T. 1. Use risk-neutral valuation to calculate the price of the security at time t in terms of the stock price, St, at time t 2. Confirm that your price satisfies the differential equation (14.16). A financial institution plans to offer a security that pays off a dollar amount equal to Inst at time T. 1. Use risk-neutral valuation to calculate the price of the security at time t in terms of the stock price, St, at time t 2. Confirm that your price satisfies the differential equation (14.16)

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