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Please Please don't copy other answers, they are wrong. If you copy other answers, I'm gonna give you a thumbs down because they are wrong
Please Please don't copy other answers, they are wrong. If you copy other answers, I'm gonna give you a thumbs down because they are wrong
3. (a) Suppose our stock model has three branches (i.e. a trinomial tree), Su,Sm, and Sd. Can we construct a replicating portfolio using only units of the stock S and a bond with risk-free rate r ? (b) What happens if we add a third instrument to our portfolio: another stock, or another bond (with a different rate)Step by Step Solution
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