Consider a binomial lattice where a security price S moves up by a factor u with probability p, or down by a factor d with probability 1 - p. If we set d > 1/u then which of the following will be TRUE?
A.
The lattice will not recombine
B.
The probability of an up move will not be constant
C.
There will always be a downward drift in the lattice
Chosen Answer:
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