The Values of U and D Are Which of the Following

question 42

Multiple Choice

The values of u and d are which of the following?

• A)the return on the stock if it goes up and down,respectively
• B)the inverse of the ratio of the up and down probabilities,respectively,and the risk-free rate
• C)the normal probabilities of up and down movements,respectively
• D)one plus the return on the stock if it goes up and down,respectively
• E)none of the above