A squiggly is an asset that pays the square of the underlying asset's price at the time of expiration minus the price of the underlying in the period before the time of expiration. For example, assume in period 0, the price of an asset is 20, while in period 1 it is 25, and in period 2 it is 21.

The payoff to the squiggly is therefore (Period 2 price - Period 1 price)2=(21-25)2=16. Another example: assume the price of the asset in period 0 is 200, period 1 180, period 2 164. The payoff to the squiggly is therefore the square of (164- 180)=256.

The price of EQT is 200. An up move is 1.2, while the up parameter times the down parameter equals 1. The interest rate is 1/39. You own a squiggly that pays off in two periods. What is the value of your asset today?