Multiple Choice
A binomial tree setting has an up-move of (with probability ) and a down move of (with probability ) ,with .The risk-free interest rate per time step is zero,so a dollar invested at the beginning of the period returns a dollar at the end of the period. In this setting,the risk-neutral probability of an up-move
A) Is
)
B) Is
)
C) Is equal to
)
D) Is equal to
)
Correct Answer:

Verified
Correct Answer:
Verified
Q14: A stock is currently trading at
Q15: A stock is currently trading at
Q16: A stock is currently trading at
Q17: Consider a binomial tree setting in
Q18: For a call option on a stock
Q20: A stock is currently trading at
Q21: Consider a binomial tree setting in
Q22: The current price of a stock is
Q23: Which of the following statements is
Q24: A stock is currently trading at