Binomial Option Pricing: Tutorial on Portfolio Replication Approach
Pricing via a replicating portfolio (1-step) Recall | Chegg.com
SOLVED: Expectation pricing formula Fact 1: By L7, construct under replicating portfolio of (S, B); with value Druce5z Vihtefu, Th; European (call) option with (square integrable) payoff. Fact 2: By L8.26, e-r'St