Question
55. In using a one-period binomial model to value an option: A.the expected payoff at the end of one period is discounted at the risk-free
55. In using a one-period binomial model to value an option:
A.the expected payoff at the end of one period is discounted at the risk-free rate.
B.option payoffs are discounted at higher rates when asset price volatility is higher.
C.the payoff in the event of an up-move is multiplied by the probability of an up-move.
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Financial Reporting Financial Statement Analysis And Valuation A Strategic Perspective
Authors: James M Wahlen, Stephen P Baginskl, Mark T Bradshaw
7th Edition
9780324789423, 324789416, 978-0324789416
