An analyst gathers the following information about an underlying asset:
- Current price: $16.0
- End-of-period upward price: $22.0
- End-of-period downward price: $12.0
- Risk-free rate: 4.0%
Using a one-period binomial model, the risk-neutral probability of a price increase is closest to: | Chartered Financial Analyst Level 1 Quiz - LeetQuiz
Chartered Financial Analyst Level 1
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An analyst gathers the following information about an underlying asset:
Current price: $16.0
End-of-period upward price: $22.0
End-of-period downward price: $12.0
Risk-free rate: 4.0%
Using a one-period binomial model, the risk-neutral probability of a price increase is closest to:
