Assume a stock price is 120 and in the next year it will


Assume a stock price is $120, and in the next year, it will either rise by 10 percent or fall by 20 percent. The risk-free interest rate is 6 percent. A call option on this stock has an exercise price of $130. What is the risk-neutral probability of a stock price increase? Do not round your intermediate calculations. 

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Finance Basics: Assume a stock price is 120 and in the next year it will
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