Bernoulli Distribution

Bermoulli Distribution A stock is prices at $100 and follows a one-period binomial process with an up move that equals 1.05 and a down move that equals 0.97. If one million Bernoulli trials are performed and the average terminal stock price is $102 , the probability of an up move is closest to ____?

Current stock price (S0) = $100.00 Up move (Su) = 1.05 Down move (Sd) = 0.97 Average terminal stock price (Savg) = $102.00

To compute the expected value: x=p⋅105+(1−p)⋅97.

Now we know that x=102, so 102=105p-97-97p p =5/8.