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Assume we are using the Black Scholes model where the risk free invest- ment earns a continuously compounded rate r and the stock price satisfies
Assume we are using the Black Scholes model where the risk free invest- ment earns a continuously compounded rate r and the stock price satisfies the stochastic differential equation dS(t) = uS(t)dt +oS(t)dBt (1) 1. What are the prices of the asset or nothing put and cash or nothing put? Thes options pay when S(T)
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