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So = 4, d= 0.5, u = 4, r = 1/4, N = 3 (expriration time) with K = 5 (strike price). At time 1,
So = 4, d= 0.5, u = 4, r = 1/4, N = 3 (expriration time) with K = 5 (strike price). At time 1, it will he either a call or put option.
a. Assume at time 1, you choose yhe more valuable option. If the 1st flip is Head, what will you choose? value of V1(H) at time 1 after choosing? and what if 1st is Tail?
b. Vo = ?
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The Critical Handbook Of Money Laundering Policy Analysis And Myths
Authors: Petrus C. Van Duyne, Jackie H. Harvey, Liliya Y. Gelemerova
1st Edition
1137523972, 978-1137523976
