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Basic Question 7 of 8
What is the most likely impact of an increase in the risk-free rate on the risk-neutral upside probability in a binomial model?
B. Increase in probability
C. Decrease in probability
A. No impact
B. Increase in probability
C. Decrease in probability
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Learning Outcome Statements
explain how to value a derivative using a one-period binomial model
CFA® 2025 Level I Curriculum, Volume 5, Module 10.