please give a detailled answer, show the calculation needed to choose the correct statement(s) ...
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please give a detailled answer, show the calculation needed to choose the correct statement(s)
Consider a one-period market where there are three assets, a stock S, a risk-free asset with gross return R; and a short forward on the stock. At the beginning of the period (i.e. t=0), the price of the stock So is a positive known quantity. At the end of the period (i.e. t = 1), the price of the stock will be one of two strictly positive values depending on a coin toss. If the result is H (head), the stock price is Si(H)= uSo otherwise it is S,(T) = ds, with d
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