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Old 03-18-2012, 07:39 PM
Greg839 Greg839 is offline
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Join Date: Mar 2012
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Default Black Scholes - Pls help

I have struggled without luck to solve the question below and will be grateful for any solutions.

Consider the Black-Scholes world with a stock that follows geometric Brownian motion. A
derivative has the following payoff at maturity: Sn
T, i.e. the nth power of the stock price at
maturity, where n is a known constant. Use the risk-neutral valuation method to calculate a
pricing formula for this derivative.
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