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Application of Its Lemma and answering the following questions Examples of applications are provided below: Calculating dG for the following questions with dS = 0.1
Application of Its Lemma and answering the following questions
Examples of applications are provided below:
Calculating dG for the following questions with dS = 0.1 S dt + 0.2 S dz:
a) G(S,T) = S*e^((r * (T-t)) where r = 0.04 , T-t = 0.5
b) G(S,T)= S^2
c)G(S,T) = S - K where K=100
d) G(S,T) = 1 if S >100; and 0 else
Please provide detailed calculation steps
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