When We Move from Assuming No Dividends to Assuming a Constant

question 18

Multiple Choice

When we move from assuming no dividends to assuming a constant dividend yield,which of the following is true for a Cox,Ross,Rubinstein tree?

• A) The parameters u and p change
• B) p changes but u does not
• C) u changes but p does not
• D) Neither p nor u changes

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Definitions:

Existential Import

The assumption within a proposition that something exists.

Square of Opposition

A diagram representing the logical relationships between certain types of propositions in classical logic.

Universal

Pertaining to or being applicable to all cases, individuals, or groups without exception.

Venn Diagram

A Venn diagram is a graphical representation using overlapping circles to illustrate the logical relationships between two or more sets of items.