16

16. In ilve rosion of the binomial model in which the factors by which the stock price goes up or doan u and d, are related by d=I/u, if the volatility is .25 and the time step is 4 months, then the favtor by which the underlying stock could go up is u= 1) 1.16 B) 1.09 C) 087 D) 1.28 E) 0.92