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Exercise 4.1. In the three-period model of Figure 1.2.2 of Chapter 1, let th interest rate be r-i so the risk-neutral probabilities are p =

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Exercise 4.1. In the three-period model of Figure 1.2.2 of Chapter 1, let th interest rate be r-i so the risk-neutral probabilities are p = (i) Determine the price at time zero, denoted Vo, of the American put that q = (ii) Determine the price at time zero, denoted (iii) Determine the price at time zero, denoted (iv) Explain why V

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