Show that if with u(x, 0) = u0(x) > 0, then u(x, ) > 0 for
Question:
Show that if
with
u(x, 0) = u0(x) > 0,
then u(x, τ ) > 0 for all τ .
Use this result to show that an option with positive payoff will always have a positive value.
Transcribed Image Text:
a?u on - 0
a?u on - 0 0, du at
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