Repeat the previous problem for n 50 What is the risk neutral probability that S1 $80 S1 $120 In previous problem Let S $100, 0 30, r 0 08, t 1, and 0 Using equation (11 12) to compute the probability of reaching a terminal node and Suidni to compute the price at that node, plot the risk neutral distribution

Question: Repeat the previous problem for n = 50. What is the risk-neutral probability that S1 < $80? S1 > $120? In previous problem Let S

Repeat the previous problem for n = 50. What is the risk-neutral probability that S1 < $80? S1 > $120?
In previous problem
Let S = $100, σ = 0.30, r = 0.08, t = 1, and δ = 0. Using equation (11.12) to compute the probability of reaching a terminal node and Suidn−i to compute the price at that node, plot the risk-neutral

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For n 50 we have h 002 10450 09600 Now we can calculate p 04... View full answer

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