3. Let r be the risk-free continuously compounded rate and A(0) today's value of an...
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3. Let r be the risk-free continuously compounded rate and A(0) today's value of an asset. For a given horizon T, assume the asset can take on two values Au,Ad with risk-neutral probabilities of (1/2,1/2). Provide an expression for Au,Ad if Var(A(T))=2T for a given volatility parameter
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