Let the CRR model with T = 2, S0 = 100 or S1 = 50, and the european contingent claim X = max{S0, S1,S2}.
i) Draw binary tree and find arbitrage free initial price of X.
ii) Determine the hedge strategy for X
iii) Assume ECC X is being traded for $100. Explain the arbitrage opportunity, if one exists.