Use the Information for the Question(s) Below

question 6

Multiple Choice

Use the information for the question(s) below.
The current price of KD Industries' stock is $20. In the next year the stock price will either go up by 20% or go down by 20%. KD pays no dividends. The one year risk-free rate is 5% and will remain constant.
-The risk-neutral probability of a down state for KD industries is closest to:

• A) 37.5%
• B) 62.5%
• C) 40.0%
• D) 60.0%

---

Definitions:

Schizophrenia

A chronic mental disorder characterized by distorted thinking, perceptions, emotions, language, self-awareness, and behavior.

Neurodevelopmental Disorder

A disorder that stems from early brain abnormalities.

Schizophrenia

A chronic mental health disorder characterized by delusions, hallucinations, disorganized speech, and impaired cognitive capability.

Neuronal Development

Neuronal development refers to the processes by which neurons form, grow, and establish connections with each other during prenatal life and beyond.