Question: Question 1: What is binomial about the binomial model? In other words, how does the model yet its name? Question 2 Assume a stock price
Question 1: What is binomial about the binomial model? In other words, how does the model yet its name? Question 2 Assume a stock price is $121, and in the next year, it will either rise by 10 pe it or fallby 20 percent. The risk-free interest rate is 6 percent. A allapsinn on this stock has an exercise price of $130. What is the price of a call option that capires in ont year? What is the chance that the stock price will rise
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