Question: We model the movement of stock prices using a Binomial tree. Each branch of the tree spans a time horizon of 5 months. The proportional

We model the movement of stock prices using a Binomial tree. Each branch of the tree spans a time horizon of 5 months. The proportional up movement on the tree (u) is 1.85.

What is the volatility of the stock implied by u?If your answer is (say) 40%, enter 0.40.

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