We model the movement of stock prices using a Binomial tree. Each branch of the ...
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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 down movement on the tree (d) is 0.74.
What is the volatility of the stock implied by d?
If your answer is (say) 40%, enter 0.40.
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