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  3. 1. (5.12) assume that the current share price of a

1. (5.12) Assume that the current share price of a stock is $100 with a...

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1. (5.12) Assume that the current share price of a stock is $100 with a volatility of 10%. Using a CRR tree model over a year with each being one trading day, predict the maximum spread in the stock's possible prices a trading day from now. Is your prediction impacted if you employ a Taylor approximation to exp(o h252) using the CRR assumptions? 1. (5.12) Assume that the current share price of a stock is $100 with a volatility of 10%. Using a CRR tree model over a year with each being one trading day, predict the maximum spread in the stock's possible prices a trading day from now. Is your prediction impacted if you employ a Taylor approximation to exp(o h252) using the CRR assumptions

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