Question: Please help to solve this by matrix calculation. Thank you. 19. You are in a two-period world where a risk-free and risky asset are traded,
Please help to solve this by matrix calculation.
Thank you.
19. You are in a two-period world where a risk-free and risky asset are traded, see the figure below for the prices and payoffs. You have a project that costs 2 at time zero and pays 4 in the up and then up state, 3 in the up and then down state, 2 in the down and then up state, and 1 in the down and then down state. What is the NPV of this project
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