The Current Price of a Non-Dividend-Paying Stock Is $30

question 14

Multiple Choice

The current price of a non-dividend-paying stock is $30.Over the next six months it is expected to rise to $36 or fall to $26.Assume the risk-free rate is zero.What is the risk-neutral probability of that the stock price will be $36?

• A) 0.6
• B) 0.5
• C) 0.4
• D) 0.3

---

Definitions:

Number of Words

The total count of words present in a piece of written or spoken content.

Writing Message

The act of composing a communication intended to convey a specific information or sentiment to an audience.

Quality

The standard of something as measured against other similar things; a degree of excellence.

Rewrite

The process of writing something again, either to improve clarity, update content, or alter the original message.