Question
Question 7: Consider a stock worth $25 that can go up or down by 15 percent per period. The risk-free rate is 10 percent. Use
Question 7: Consider a stock worth $25 that can go up or down by 15 percent per period. The risk-free rate is 10 percent. Use one binomial period.
a) Determine the two possible stock prices for the next period.
My Answer: Su = 28.75 Sd = 21.25
Is this correct?
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New Venture Creation A Framework For Entrepreneurial Start-ups
Authors: Paul Burns
2nd Edition
1352000504, 978-1352000504
