Suppose a stock worth $50 today is equally likely to be worth $100 or $25 a year

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Suppose a stock worth $50 today is equally likely to be worth $100 or $25 a year from today. What is a fair price to pay today for the option to buy this stock a year from now?

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Data Analysis and Decision Making

ISBN: 978-0538476126

4th edition

Authors: Christian Albright, Wayne Winston, Christopher Zappe

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Posted Date: Oct 04, 2022 08:12 AM

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Suppose a stock worth $50 today is equally likely to be worth $100 or $25 a year

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Data Analysis and Decision Making

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