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A stock price is currently $ 5 0 . Over each of the next two three - month periods it is expected to go up

A stock price is currently $50. Over each of the next two three-month periods it is expected to go up by 6% or down by 5%. The risk-free interest rate is 5% per annum with continuous compounding.a) Based on the information above what is the risk neutral probability of an up move?

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