Consider a single-stage binary tree, assuming S0=4, u=2, d=1/2, r=1/4, then S1(u)=8, S1(d)=2. Suppose the strike price of the European put option is K = 5. How many units of cash do investors need to prepare at the beginning of the period in order to replicate the option? Please verify your conclusions with three methods (No Arbitrage, Risk Neutral, State Price).

Consider a single-stage binary tree, assuming

S0=4, u=2, d=1/2, r=1/4, then S1(u)=8, S1 (d)=2.

Suppose the strike price of the European put

option is K= 5. How many units of cash do

investors need to prepare at the beginning of the

period in order to replicate the option? Please

verify your conclusions with three methods (No

Arbitrage, Risk Neutral, State Price).

here no language problems. please, help to do this task. thx

S0=4,u=2,d=21,r=41 S1(u)=8,S1(d)=2 K=5 ? S0=4,u=2,d=21,r=41,S1(u)=8,S1(d)=2 K=5 Consider a single-stage binary tree, assuming S0=4,u=2,d=1/2,r=1/4, then S1(u)=8,S1(d)=2. Suppose the strike price of the European put option is K=5. How many units of cash do investors need to prepare at the beginning of the period in order to replicate the option? Please verify your conclusions with three methods (No Arbitrage, Risk Neutral, State Price). S0=4,u=2,d=21,r=41,S1(u)=8,S1(d)=2K=5 S0=4,u=2,d=21,r=41 S1(u)=8,S1(d)=2 K=5 ? S0=4,u=2,d=21,r=41,S1(u)=8,S1(d)=2 K=5 Consider a single-stage binary tree, assuming S0=4,u=2,d=1/2,r=1/4, then S1(u)=8,S1(d)=2. Suppose the strike price of the European put option is K=5. How many units of cash do investors need to prepare at the beginning of the period in order to replicate the option? Please verify your conclusions with three methods (No Arbitrage, Risk Neutral, State Price). S0=4,u=2,d=21,r=41,S1(u)=8,S1(d)=2K=5