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A stock price is currently $100 and at the end of four months it will be St . A derivative written on this stock pays
A stock price is currently $100 and at the end of four months it will be St . A derivative written on this stock pays off [St^(1/3)] in four months. Given that u = 1.15, d = 0.87, and that the risk-free interest rate is 10% p.a. (continuously compounded), answer the following questions using a one-period binomial model (show all the details of your calculations and display the results with four decimal places): Calculate the value of
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