Question: Consider a one step binomial tree on stock with a current price of $200 that can go either up to $230 or down to $170
Consider a one step binomial tree on stock with a current price of $200 that can go either up to $230 or down to $170 in 2 years. The stock does not pay diidend. Continuously compounding interest rate is 5% Compute the risk-neutral probability of the stock going up to the $230 node of the tree in 2 years
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