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  3. a lampedusa pays the value of a stock on the expir

A Lampedusa pays the value of a stock on the expiration data squared minus 100....

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Accounting

A Lampedusa pays the value of a stock on the expiration data squared minus 100. Note that a Lampedusa is an asset, but not an option. Though you solve for it the same way. So, for example, if the price of the underlying stock on the expiration data is 12, the Lampedusa pays 144-100=44. Today the price of the underlying asset is 14, and the value of the up move is 1.3. The interest rate is 1/9. What is the value of a Lampedusa expiring in two periods? Please help ! I will thumbs up your answer !

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