In the Cox-Ross-Rubinstein (CRR)binomial Model,the Volatility Is Given As $\sigma = 0.2$

question 7

Multiple Choice

In the Cox-Ross-Rubinstein (CRR) binomial model,the volatility is given as $\sigma = 0.2$ .The risk-free rate of interest is 2%.What is the risk-neutral probability of an up move on a binomial tree with a time step of one month?

• A)0.45
• B)0.50
• C)0.55
• D)0.60

Identify and describe the common obstacles to achieving happiness.

Explain the optimum arousal theory and its relevance to everyday behavior and motivation.

Compare and contrast the James-Lange theory and Cannon-Bard theory of emotion.

Distinguish between intrinsic and extrinsic motivation and their impact on behavior.

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Definitions:

Free Trade

A policy wherein a government does not discriminate against imports or interfere with exports by applying tariffs (to imports) or subsidies (to exports).

Tariffs

Government levies on goods brought into the country.

Import Quotas

Import Quotas are government-imposed limits on the quantity or value of goods that can be imported into a country, typically used to protect domestic industries and control trade balances.

Acquired Comparative Advantage

An advantage a country develops over time in producing certain goods or services, often through investment in education, infrastructure, or technology.