Homework Set 1
Math 456
Topics in Financial Mathematics
Prof. Wickerhauser
Read Chapters 1 and 2 of the textbook, "Binomial Models In Finance" by
John van der Hoek and Robert J. Elliott
Do the following exercises from the textbook Chapter 2, pp.34--36:
Exercise 2.36. There is an error, it should read "In Example 2.10 show that 0 ≤ pi ≤ 1."
Exercise 2.39. Leave K as a parameter in your graph and your answer.
Exercise 2.40. Again, leave K as a parameter in your graph and your answer.
Exercise 2.41.
Exercise 2.43.
Exercise 2.44.
Exercise 2.45.
Exercise 2.46.