Explain how you would value a derivative that pays off 100R in 5 years, where R is the
Chapter 30, Problem 30.1(choose chapter or problem)
Explain how you would value a derivative that pays off 100R in 5 years, where R is the 1-year interest rate (annually compounded) observed in 4 years. What difference would it make if the payoff were in (a) 4 years and (b) 6 years?
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