(b) You were asked for opinion on the valuation technique applied by one of junior colleagues. He has applied a Monte Carlo technique for valuation of Asian option on non-dividend paying stock currently trading at $500. The time to expiration of the option is 14 months. The stock price paths are simulated by the process given as a ds. jedt + adWe, where = 0.019 and o = 1.75, W, is a Brownian motion, and S. 490. Discuss your major concerns related to such an approach for option valuation. (2 marks) Asian Options is instrument provides a payoff based on the average asset price during the life of an option. For instance, the payoff of an Asian call can be described as maro, Average(S) - X). (b) You were asked for opinion on the valuation technique applied by one of junior colleagues. He has applied a Monte Carlo technique for valuation of Asian option on non-dividend paying stock currently trading at $500. The time to expiration of the option is 14 months. The stock price paths are simulated by the process given as a ds. jedt + adWe, where = 0.019 and o = 1.75, W, is a Brownian motion, and S. 490. Discuss your major concerns related to such an approach for option valuation. (2 marks) Asian Options is instrument provides a payoff based on the average asset price during the life of an option. For instance, the payoff of an Asian call can be described as maro, Average(S) - X)