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Suppose you are attempting to value a 1-year expiration option on a stock with volatility (i.e., annualized standard deviation) of σ = 0.49. a. 1 period of 1 year. b. 4 subperiods, each 3 months. c. 12
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Suppose you are attempting to value a 1-year expiration option on a stock with volatility (i.e., annualized standard deviation) of σ = 0.49. a. 1 period of 1 year. b. 4 subperiods, each 3 months. c. 12 subperiods, each 1 month. What would be the appropriate values for u and d if your binomial model is set up using: (Do not round intermediate calculations. Round your answers to 4 decimal places.)

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Suppose you are attempting to value a 1-year expiration option on a stock with volatility-example-1
User Mike Schilling
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