You are to use a binomial forward tree model to model the price movements of a stock
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You are to use a binomial forward tree model to model the price movements of a stock that pays dividends continuously at a rate proportional to its price. The length of each period is three months. If Var[ln[S(t)]] = 0.25t for t > 0, find p∗ , the risk-neutral probability of an up move.
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