Calculate the risk neutral probability of stocks going down

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Question

The current price of southwest airline stocks is $39. In the next year this stocks price can either go up by $12.00 or go down by by $8.. The stock pays no dividends. That one year risk free interest rate is 6% and will remain constant. Calculate the risk neutral probability of stocks going down for this year pick the closest number.

Reference no: EM133674446

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