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Describe the various approaches ( creating portfolios that replicate option payoffs; creating risk - free portfolios; using the Binomial Option pricing model; using the Black

Describe the various approaches (creating portfolios that replicate option payoffs; creating risk-free portfolios; using the Binomial Option pricing model; using the Black-Scholes Option pricing model) that can be used to price options. Highlight the similarities and differences in the Binomial Option pricing model and the Black-Scholes Option pricing model.

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