What is the initial investment and how much stock should we
Suppose we have a stock with S0 = 2, S1(H) = 3, S1(T) = 1; suppose the interest rate r = :05. We wish to replicate a security that pays 10 if the coin is heads and 5 if it's tails. What is the initial investment, and how much stock should we buy?
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suppose we have a stock with s0 2 s1h 3 s1t 1 suppose the interest rate r 05 we wish to replicate a security that
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