Question: In a one-period binomial model, assume that the current stock price is $100, and that it will rise to $110 or fall to $90 after
In a one-period binomial model, assume that the current stock price is $100, and that it will rise to $110 or fall to $90 after one month. If the risk-neutral probability of the stock going up or down is equal, what is the one-month risk-free interest rate in continuouslycompounded and annualized terms?
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