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Q1. You believe stock price by year end will have the following multinomial distribution (15 points): Q1a. What should be the stock price TODAY? (3

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Q1. You believe stock price by year end will have the following multinomial distribution (15 points): Q1a. What should be the stock price TODAY? (3 points) Q1b. what is the prob that a 900 strike CALL will expire ITM? ( 3 points) Q1c. what is the conditional average price of underlying stock when 900 strike CALL expires ITM? (3 points) Q1d. what is the conditional average payment from the 900 strike CALL option when the CALL expires ITM? (3 points) Q1e. based on Q1b-Q1d, how much should the 900 CALL be priced at today? (3 points)

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