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A stock price is currently $50. It is known that at the end of two months it will be either $53 or $48. The risk-free

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A stock price is currently $50. It is known that at the end of two months it will be either $53 or $48. The risk-free interest rate is 10% per annum with continuous compounding. What is the value of a derivative that pays off [max(50 S7,0)]2 where Sy is the stock price in four months? Start by first creating a riskless portfolio and show the entire working

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