Multiple Choice
If the stock pays a specific dollar dividend and the stock price,to include the dividend,follows the binomial up and down factors,which of the following will happen?
A) the binomial tree will recombine
B) the binomial tree will not recombine
C) the option will be mispriced
D) an arbitrage profit will not be possible
E) none of the above
Correct Answer:
Verified
Correct Answer:
Verified
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