The Student Room Group

Elementary single period financial market

I have calculated the risk-neutral probability measure for a risky asset in the elementary single period market model which was (5/8,3/8). I was given S0 = 25, S1(H) = 30, S1(T) = 20. The effective interest rate per period is 5%. I need to show that this risk neutral probability measure is unique but I don't how to do that. Any suggestions?

Quick Reply

Latest

Trending

Trending