QUESTION 3 We consider a 4-period binomial tree model for a call option. Suppose the...
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QUESTION 3 We consider a 4-period binomial tree model for a call option. Suppose the risk-free interest rate is 4%, the up-factor u = 1.156, and down-factor d =0.844. The probability of the stock price ends at the second to the highest level (after four periods), based on the risk-neutral probability, is closest to 0.269 0.369 0.469 0.569
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