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1. Suppose a stock has a current price $50 and will pay a dividend $2 at the end of second month. The volatility of the

1. Suppose a stock has a current price $50 and will pay a dividend $2 at the end of second month. The volatility of the stock is 40%, and the interest rate is 5%. Use a four-period binomial tree to model the stock price dynamics in four months

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