A stock is currently priced at $15. The dynamic of the stock price is modelled using the familiar specification of: St+=Stexp[(r22)+zt+] where =40% p.a. and r=6% p.a. compounded continuously. A derivative trader attempts to price a European-style derivative on the stock with the following features: - It is a knock-in derivative with 3 months to maturity and a knock-in barrier of H=$18 - The derivative is knocked-in if the terminal share price is above the barrier - If the derivative is knocked-in, it will have a terminal payoff shown below: tample, z(i=2,t=1)=0.4 A stock is currently priced at $15. The dynamic of the stock price is modelled using the familiar specification of: St+=Stexp[(r22)+zt+] where =40% p.a. and r=6% p.a. compounded continuously. A derivative trader attempts to price a European-style derivative on the stock with the following features: - It is a knock-in derivative with 3 months to maturity and a knock-in barrier of H=$18 - The derivative is knocked-in if the terminal share price is above the barrier - If the derivative is knocked-in, it will have a terminal payoff shown below: tample, z(i=2,t=1)=0.4