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please answer asap will give you good feedback Assume the one period binomial model with initial share price 400, up and down factors u=1.25,d=0.9 and

please answer asap will give you good feedback

image text in transcribed Assume the one period binomial model with initial share price 400, up and down factors u=1.25,d=0.9 and interest compounded at nominal rate (per time period) of 3%. Consider an option with payoff (S(0)+S(1))/2. The replicating portfolio for this option at time 0 will have shares and pounds in a bank. State your answers to three significant figures

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