14. The initial stock price is $100. The stock moves up each period by a factor of 1.3 and down by a factor of 0.8. If the simple interest rate per period is 1%, what is the risk-neutral probability of an up move in the stock price?
Draw the stock price tree for three periods and price an Europan call option for three periods at strike $105.
We need at least 10 more requests to produce the solution.
0 / 10 have requested this problem solution
The more requests, the faster the answer.