Single period binomial tree

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Suppose you have written a derivative that pays the cubic value of the stock price at maturity T=1; that is, it pays S^3(1). The stock currently trades at S(0)=100. Your model is a single period binomial tree with up value for the stock equal to 102 and the down value equal to 98. One dollar deposited at time zero into the risk-free asset returns 1.01 dollars at maturity.

Enter the number of shares that the replicating portfolio holds (if selling short, use the minus sign):

Enter the cost of the replicating portfolio:

Reference no: EM133204910

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