Let= $100,= 0.30,= 0.08,= 1, and= 0. Using equation (11.12) to compute the probability of reaching a terminal node andin−ito compute the price at that node, plot the risk-neutral distribution of year-1 stock prices as in Figures 11.7 and 11.8 for= 3 and= 10.
equation (11.12)
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