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Question 8 1 pts A trader short sells a share currently worth $17 and invests the payoff in a bank. In the Cox-Ross-Rubenstein notation

 

Question 8 1 pts A trader short sells a share currently worth $17 and invests the payoff in a bank. In the Cox-Ross-Rubenstein notation this share has up factor u = 1.08 and down factor d = 1/u and the return on an investment over one time-step is R=1.02. After one time-step the trader returns the short sold share to the original owner and also withdraws the bank investment plus interest. Say the trader makes a profit on this investment. What is the trader's profit?

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