Question: Let S 0 = 1 0 0 , u = 1 . 1 5 , d = 0 . 9 , p = 0 .

Let S0=100, u =1.15, d =0.9, p =0.6 and r =7.5% in a three-step binomial-tree model. Consider
another type of lookback option which pays off S3 min{S0, S1, S2, S3} at time 3.
(1a) Use risk-neutral pricing to find todays price of this lookback option.
(1b) Then use replication method to verify this price

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