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Find assets underlying value

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Reference no: EM133126180

Consider the following asset market: The interest rate is zero and the asset has no value after 5 years. The asset pays dividends of $1 or $3 each year - 50% chance of each - and does so for 5 years. If you were to sell this asset in year 1 - what would be its underlying value? If you were to sell it in year 2 what would be its underlying value and if you were to sell it in year 5 what would be the assets underlying value?

Reference no: EM133126180

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