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Calculate a binomial model's up and down factors given a stock's annual volatility of 20% and the risk-free interest rate of 3.0%. The analyst will

Calculate a binomial model's up and down factors given a stock's annual volatility of 20% and the risk-free interest rate of 3.0%. The analyst will use the factors to price an option that expires in six months.

  • 1.15 and 0.87
  • 1.20 and 0.80
  • 0.9704 and 0.033

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