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Probability of reaching a terminal node

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Let S = $100, σ = 0.30, r = 0.08, t = 1, and δ = 0. Using equation (11.12) to compute the probability of reaching a terminal node and S(u^(n-i))(d^i) to compute the price at that node, plot the risk-neutral distribution of year-1 stock prices as in Figures 11.7 and 11.8 for n = 3 and n = 10.

Reference no: EM133059739

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