We want to find the fair-value of a European binary call on an underlying with initial value . At each time step, the underlying can either grow by or shrink by . At expiry (), the call will pay if and otherwise. Round to decimal points.
We want to find the fair-value of a European binary call on an underlying with initial value . At each time step, the underlying can either grow by or shrink by . At expiry (), the call will pay if and otherwise. Round to decimal points.
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