Question
The risk neutral probability is equal to 0.6 and the risk free rate is 5%. Furthermore the present value of cash flows is equal to
The risk neutral probability is equal to 0.6 and the risk free rate is 5%. Furthermore the present value of cash flows is equal to V = 100. If d = 1/u, then what is the value of Vin the downstate in the next period? Please round your answer to one decimal place and use a period to indicate the decimal place.
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Financial Accounting an introduction to concepts, methods and uses
Authors: Clyde P. Stickney, Roman L. Weil, Katherine Schipper, Jennifer Francis
13th Edition
978-0538776080, 324651147, 538776080, 9780324651140, 978-0324789003
