Question
Binomial option pricing, AD securities and the limiting Black-Scholes model. Be able to explain the Binomial model for t = 0,1,2,3. Be able to explain
Binomial option pricing, AD securities and the limiting Black-Scholes model. Be able to explain the Binomial model for t = 0,1,2,3. Be able to explain how it can be used to value a European call option on a stock. Explain the role of the Arrow-Debreu securities and their prices. Also be able to give the intuition about how the Binomial pricing model converges to the Black-Scholes formula.
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Personal Finance Turning Money Into Wealth
Authors: Arthur Keown
8th Edition
0134730364, 978-0134730363
