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measure. 4. Consider a 3-period binomial model of stock price process. Assume P(H) = 1/2. Let the initial stock price be So= 10, u =

measure. 4. Consider a 3-period binomial model of stock price process. Assume P(H) = 1/2. Let the initial stock price be So= 10, u = 2 denote up-factor, d = 0.5 denote down-factor. Compute the conditional expectations E1 (S3), E2 (S3).

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