Question
The current price of a non-dividend-paying stock is $58. Over the next six months it is expected to rise to $85 or fall to $44.
The current price of a non-dividend-paying stock is $58. Over the next six months it is expected to rise to $85 or fall to $44. Assume the risk-free rate is zero. What is the risk-neutral probability of that the stock price will be $44 (i.e. the risk neutral probability of a down movement)?
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Essentials Of Real Estate Finance
Authors: Doris Barrell
15th Edition
1475462077, 978-1475462074
