Question: Problem 2: Consider a one-period binomial model with r = .1, u= 1.2, and d .9. Alice thinks the stock will go up and Andy

Problem 2: Consider a one-period binomial model with r = .1,

Problem 2: Consider a one-period binomial model with r = .1, u= 1.2, and d .9. Alice thinks the stock will go up and Andy thinks that the stock will go down, so they make a bet. If Si > So, Andy must pay Alice $100. If Si

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