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Locate the date of the amount
In the original call example, q=0.5 and terminal claim amounts 30/0 produce weighted expiry amount 15. The calculation has not yet converted that future amount to today.
Complete the discount step
With period factor 1.05, current value is 15/1.05=14.285714. Reporting 15 as the model price omits a required date conversion.
| Quantity | Value |
|---|---|
| Pricing-weighted expiry amount | 15 |
| Period factor | 1.05 |
| Current claim value | 14.285714 |
Do not discount current components twice
The replication route already combines current stock cost and current cash. Dividing that time-zero total by 1.05 again would discount twice. Identify each amount’s date before applying a factor.
Use the alternate route
Compare the completed price with current replication cost and verify both terminal states. This catches a date omission that can be missed when only the weighting arithmetic is reviewed.