Question
The current price of a non-dividend-paying stock is $40. Over the next six months it is expected to rise to $44 or fall to $36.
The current price of a non-dividend-paying stock is $40. Over the next six months it is expected to rise to $44 or fall to $36. Assume the risk-free rate is zero. What is the risk-neutral probability of that the stock price will be $42?
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Behavioral Finance And Capital Markets
Authors: A. Szyszka
5th Edition
1137338741, 9781137338747
