Question: Repeat Question 3 but with = 0.20 and = 0.20. Repeat Question 3 Suppose you wish to approximate the distribution of a stock

Repeat Question 3 but with μ = 0.20 and σ = 0.20.

Repeat Question 3

Suppose you wish to approximate the distribution of a stock price three months from now using a binomial tree with 100 steps. Suppose also that the stock price distribution is given to be lognormal with μ = 0.04 and σ = 0.40. What values would you use for the parameters of the binomial model?

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