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= Exercise 4.5. Calculate the price of cash-or-nothing option from the tree limit. Namely, the payoff function is 1 if S >E, Payoff(S) = (4.18)
= Exercise 4.5. Calculate the price of cash-or-nothing option from the tree limit. Namely, the payoff function is 1 if S >E, Payoff(S) = (4.18) 0 otherwise, which is to be used instead of the Call payoff function in the integration formula (4.10). Exercise 4.6. Calculate the price of stock-or-nothing option from the tree limit: Sif S >E, Payoff (S) = (4.19) 10 otherwise, see Exercise 4.5. { 1 -22/2dz. V=e-rT | Payoff (Soe(~0*/27+oVT:) (4.10) 27 = Exercise 4.5. Calculate the price of cash-or-nothing option from the tree limit. Namely, the payoff function is 1 if S >E, Payoff(S) = (4.18) 0 otherwise, which is to be used instead of the Call payoff function in the integration formula (4.10). Exercise 4.6. Calculate the price of stock-or-nothing option from the tree limit: Sif S >E, Payoff (S) = (4.19) 10 otherwise, see Exercise 4.5. { 1 -22/2dz. V=e-rT | Payoff (Soe(~0*/27+oVT:) (4.10) 27
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