1. (Stock lattice) A stock with current value S(0) 100 has an expected growth rate of its...
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1. (Stock lattice) A stock with current value S(0) 100 has an expected growth rate of its logarithm of 12% and a volatility of that growth rate of 20% Find suitable parameters of a binomial lattice representing this stock with a basic elementary period of 3 months Draw the lattice and enter the node values for 1 year. What are the probabilities of attaining the various final nodes?
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