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Suppose the current stock price is 50 at the end of 6

Suppose the current stock price is $50. At the end of 6 months it will be either $56 or $45. The risk-free interest rate is 2% per annum. What is the risk-neutral probability that the stock price will increase in 6 months? Report in percentage such as 55.55%.

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Finance Basics: Suppose the current stock price is 50 at the end of 6

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Solution Preview :

Prepared by a verified Expert

Finance Basics: Suppose the current stock price is 50 at the end of 6

Reference No:- TGS0643029

Have a Question? (oR Write a Review)

Recent Questions Asked Finance Basics

Q : A stock price is currently 70 over each of the next two

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Solution Preview :

Prepared by a verified Expert

Finance Basics: Suppose the current stock price is 50 at the end of 6

Reference No:- TGS0643029

Recent Questions Asked Finance Basics

Q : A stock price is currently 70 over each of the next two

Q : Calculate the price of a 4-month european call option on a

Q : Calculate the price of a 4-month european call option on a

Q : Currently a stock price is 51 over each of the next 2

Q : Suppose the current stock price is 50 at the end of 6

Q : A 1-month european call option on a non-dividend-paying

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