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Under the Binomial Model,which of the Following Equations Represent the Risk-Neutral

Question 7

Multiple Choice

Under the binomial model,which of the following equations represent the risk-neutral probabilities for the up move? (u = ratio of next period's share price to this period's price if the up state occurs,d = ratio of next period's share price to this period's price if the down state occurs,rf = risk-free rate.)


A) Under the binomial model,which of the following equations represent the risk-neutral probabilities for the up move? (u = ratio of next period's share price to this period's price if the up state occurs,d = ratio of next period's share price to this period's price if the down state occurs,r<sub>f</sub> = risk-free rate.)  A)    B)    C)    D)
B) Under the binomial model,which of the following equations represent the risk-neutral probabilities for the up move? (u = ratio of next period's share price to this period's price if the up state occurs,d = ratio of next period's share price to this period's price if the down state occurs,r<sub>f</sub> = risk-free rate.)  A)    B)    C)    D)
C) Under the binomial model,which of the following equations represent the risk-neutral probabilities for the up move? (u = ratio of next period's share price to this period's price if the up state occurs,d = ratio of next period's share price to this period's price if the down state occurs,r<sub>f</sub> = risk-free rate.)  A)    B)    C)    D)
D) Under the binomial model,which of the following equations represent the risk-neutral probabilities for the up move? (u = ratio of next period's share price to this period's price if the up state occurs,d = ratio of next period's share price to this period's price if the down state occurs,r<sub>f</sub> = risk-free rate.)  A)    B)    C)    D)

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