Question: The risk neutral probability is equal to 0 . 7 and the risk free rate is 4 % . Furthermore the present value of cash
The risk neutral probability is equal to and the risk free rate is Furthermore the present value of cash flows is equal to V If d u then what is the value of V in the downstate in the next period? Please round your answer to one decimal place and use a period to indicate the decimal place eg instead of
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
