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Unformatted text preview: I n-class Exe rcise10
ial e ode e • I n binom tre m l, which distribution do weassum t hefuturestock pricein thene pe follows? xt riod a rivativewith a • What is thebasic ide in pricing a de binom m l? ial ode plicatea Europe call? an • How do you re plicatea Europe put? an • How do you re s atte • Doe thephysical probability of futurestock pricem r in pricing de rivative s? d rivative s? • Which probability is use in pricing de )h • Why do wecall e( r −δrisk-ne − d utral probability? p* = oxu − d ost • I n your opinion, which part is them difficult for C Ross-Rubinste to inve thebinom tre m thod? in nt ial e e ...
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This note was uploaded on 01/26/2010 for the course FINA 2103 taught by Professor Wong during the Winter '08 term at HKU.
- Winter '08