Question: - 40 pts For a BAPM with N = 3, r = .1, u = 1.5, d= .9, p=q=.5, and So = 7.43, determine (a)

- 40 pts For a BAPM with N = 3, r = .1, u = 1.5, d= .9, p=q=.5, and So = 7.43, determine (a) the arbitrage free price of an Asian option with value at maturity given by VN = (Save-SN+, with Save being the arithmetic average and payoff only at maturity the replicating strategy for this Asian option. - 40 pts For a BAPM with N = 3, r = .1, u = 1.5, d= .9, p=q=.5, and So = 7.43, determine (a) the arbitrage free price of an Asian option with value at maturity given by VN = (Save-SN+, with Save being the arithmetic average and payoff only at maturity the replicating strategy for this Asian option

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