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What is the risk-neutral probability of a down state

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Question - The current price of KD Industries stock is $20. In the next year the stock price will either go up by 20% or go down by 20%. KD pays no dividends. The one-year risk-free rate is 5% and will remain constant. What is the risk-neutral probability of a down state for KD Industries?

Reference no: EM132958306

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