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Montana Railroad has 90 million shares outstanding with a current market price of $24.23 per share. In one year, the share price is equally likely
Montana Railroad has 90 million shares outstanding with a current market price of $24.23 per share. In one year, the share price is equally likely to be $28 or $19. The risk-free interest rate is 5%. Compute the risk-neutral probability that Montana Railroad's stock price will decrease. 28.4% 50% 67.8% 71.6%
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