Question: For a BAPM with N = 3 , r = . 1 , u = 1 . 5 , d = . 9 , and

For a BAPM with N =3, r =.1, u =1.5, d =.9, and S0=7.43,
determine the arbitrage free price of a floating strike Lookback option
(Smax SN ) and its replicating strategy.

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