One way to model an option with dividends in the binomial framework is for the stock price minus the present value of the dividends to grow by the up and down factors. True or False?

Higher a stock’s volatility, why does the higher the probability of large increases or decreases in market price?

Use the put-call parity relationship to demonstrate that an at-the-money call option on a nondividend-paying stock must cost more than an at-the-money put option. Show that the prices of the put and call will be equal if                    S0 = (1 + r)T..

In a binomial tree created to value an option on a stock, what is the expected return on the option? O Zero O The return required by the market O The risk-free rate O It depends on the volatility AL