Question: Develop equity call and put valuation R functions for European digital or binary options that may incorporate the payment of dividends. ii . Construct two
Develop equity call and put valuation R functions for European digital or binary options that may incorporate the payment of dividends.
ii Construct two illustrative examples for the digital call and a further two examples for the digital put that show your functions in action.
iii. How would you now handle American exercise for digital calls and puts?
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