Question: Let's think about the two assets model, with risky asset with two outcomes. #1 Prove that the random variable D(w) = max {S1(w) - K,

Let's think about the two assets model, with risky asset with two outcomes. #1 Prove that the random variable D(w) = max {S1(w) - K, O} is a contingent claim (here S1(w) is the price of the risky asset in period 1) #2 Find the replicating portfolio #3 Find the price of

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