appropriate for modeling the price of Microsoft stock? A. Lognormal distribution B. Continuous uniform distribution C. Bernoulli trial D. Standard normal distribution Suppose we use a binomial tree to represent the dynamics of the daily changes in the S&P 500, and the daily probability of an upward movement is p=0.5. If the daily price movements are independent, what is the probability that the S&P 500 increases three days in a row? A. 0.500 B. 0.250 C. 0.875 D. 0.125

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