An asset has two possible values next period, (X^{u}=50) and (X^{d}=500). If you are told that the

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An asset has two possible values next period, $X^{u}=50$ and $X^{d}=500$. If you are told that the state price probability in the $u$ state is 0.4 and the risk free interest rate is $10 \%$, what is the value of the asset?

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Lectures On Corporate Finance

ISBN: 9789812568991

2nd Edition

Authors: Peter L Bossaerts, Bernt Arne Odegaard

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Question Posted: May 21, 2024 03:01 AM

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An asset has two possible values next period, (X^{u}=50) and (X^{d}=500). If you are told that the

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Lectures On Corporate Finance

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