Assume that the stock price follows a geometric Brownian motion, where current price So 100, expected return p 0 and volatility a 080 The riskfree interest rate r 002 pa a What is the price of a binary option that pays $100 if the stock price in 12 months is greater than 150 What is the realworld expected payoff of the binary option

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A binary option is a financial instrument that turns every trade into a simple yes or no question yo... View the full answer