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Part 1 : What is the value of this option in Year 1 ( t = 1 ) in the down state ( where the
Part :
What is the value of this option in Year t in the down state where the stock price is $
Hint: use the replicating portfolio method from lecture.
Please enter your answer in dollars, without the $ sign, with at least two decimals of precision. For example, enter $ as
Part :
What is the value of this option in Year Note this option will expire pay out in Year
Hint: use the answers to the previous two problems.
Please enter your answer in dollars, without the $ sign, with at least two decimals of precision. For example, enter $ as
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