Draw the labeled tree with Prufer code 344567

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Colby Messinger answered 2 years ago

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Use a 2 step binomial tree to value a new exotic derivative. Draw the tree and label the stock prices and derivative values at each node. The option expires in 6 months. The interest rate is 10% annually continuously compounded. The Strike Price (K) is 100. The spot price is at 100. U= 1.2 and D= 0.8 for each quarterly period. The payoff of this derivative is (ST/K). By this I mean that the payoff is the price of the...

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Use a 2 step binomial tree to value a new exotic derivative. Draw the tree and label the stock prices and derivative values at each node. The option expires in 6 months. The interest rate is 10% annually continuously compounded. The Strike Price (K) is 100. The spot price is at 100. U= 1.2 and D= 0.8 for each quarterly period. The payoff of this derivative is (ST/K). By this I mean that the payoff is the price of the...

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Draw the labelled tree corresponding to the Prufer sequence 【3，3，4，4，5，5】

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The following code will generate a Decision Tree. You need to run the code and explain the tree. After you get the Tree. You need to explain how does it draw like that. install.packages("rpart.plot") # install package rpart.plot ########################################## # section 7.1.1 Overview of a Decision Tree ########################################## library("rpart") library("rpart.plot") # Read the data setwd("c:/data/") banktrain <- read.table("bank-sample-test.csv",header=TRUE,sep=",") ## drop a few columns to simplify the tree drops<-c("age", "balance", "day", "campaign", "pdays", "previous", "month") banktrain <- banktrain [,!(names(banktrain) %in% drops)]...

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Draw the labeled tree with Prufer code 344567

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