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Given 10 trials of risk-neutral stock prices and the 1-year risk free rate. begin{tabular}{|c|} hline Trial 1 2 3 4
Given 10 trials of risk-neutral stock prices and the 1-year risk free rate. \begin{tabular}{|c|} \hline Trial \\ 1 \\ 2 \\ 3 \\ 4 \\ 5 \\ 6 \\ 7 \\ 8 \\ 9 \\ 10 \end{tabular} a) What is the value of a derivative that pays StK the first time StK>0 and 0 otherwise with K=100 ? b) What if in addition the 1-year risk-free rate at that point in time of the payoff must be greater or equal to 3.00% Given 10 trials of risk-neutral stock prices and the 1-year risk free rate. \begin{tabular}{|c|} \hline Trial \\ 1 \\ 2 \\ 3 \\ 4 \\ 5 \\ 6 \\ 7 \\ 8 \\ 9 \\ 10 \end{tabular} a) What is the value of a derivative that pays StK the first time StK>0 and 0 otherwise with K=100 ? b) What if in addition the 1-year risk-free rate at that point in time of the payoff must be greater or equal to 3.00%
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