Question: (c) Show that for h(t, T) = ( +(T - t). where r is the risk-free interest rate and a is the stock price

(c) Show that for h(t, T) = ( +(T - t). where r is the risk-free interest rate and a is the stock price volatility, D(t, S) can be the price of a derivative on the share. (7 marks)

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