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Replicating a binary claim · Part 2 of 3
A stock at $50 will be worth either $60 or $40 in one period. $1 invested riskless grows to $1.02 over the period. A claim pays $10 if the stock goes up and nothing if it goes down.
What is the claim worth today?
Answer with a number. Fractions, powers and expressions like 23/6 or C(52,5) are read correctly in practice.
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