Determine the Value of U for a Three Period Binomial

question 43

Multiple Choice

Determine the value of u for a three period binomial problem when the option's life is one-half a year and the volatility is 0.48.Use the model for u that does not require the risk-free rate.

• A)1.22
• B)1.48
• C)1.40
• D)1.32
• E)none of the above