T
Teacher's Pet
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Sorry if I am asking a stupid question.
I refer to the ASET for this qns; since this replicating strategy is a self-financing strategy, should V(U) be equal to atAu + btBu + ctCu = X, where 0 <= t < U instead?
The reason is because since it is self replicating(i.e. there is no inflow or outflow of cash to bring it up to X) then the units of A, B and C at the onset(i.e. time t) should remain the same throughout time t to time u?
Appreciate any advice on my understanding. Cheers!
I refer to the ASET for this qns; since this replicating strategy is a self-financing strategy, should V(U) be equal to atAu + btBu + ctCu = X, where 0 <= t < U instead?
The reason is because since it is self replicating(i.e. there is no inflow or outflow of cash to bring it up to X) then the units of A, B and C at the onset(i.e. time t) should remain the same throughout time t to time u?
Appreciate any advice on my understanding. Cheers!