For this question, I've worked out the payoffs at N=3 but I'm not able to understand how to calculate the the expectation of the terms inside. If anyone could tell me how to find the expectation of the terms in the square brackets then that would be very helpful. If we had expectation at time 1 of just V3 inside the square bracket then I know how to find that out but here V3 is being divided by (1+r1)(1+r2) and so I'm getting a bit confused when trying to find the expectation.
Could someone check my solution please.
Any help would be much appreciated.