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Consider a One-Period Binomial Model of 6 Months

Question 14

Multiple Choice

Consider a one-period binomial model of 6 months.Assume the stock price is $63.00,σ = 0.28,r = 0.05 and the stock's expected return is 14.0%.What is the true probability of the stock going up?


A) 56.6%
B) 52.4%
C) 48.2%
D) 46.4%

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