binomial

  1. W0LF

    Option Pricing using binomial method

    Hi, I have had a quick search but not found the answer. When pricing options using the binomial method, are you supposed the discount future option pricing back to current node using relevant discount rates? I have seen an example where this is not done (the current value is just a weighted...
  2. R

    Valuation of binomial two step pricing model

    Hi- I am trying to understand the answer for this problem: The current price of a stock is $30. In each of two time steps, where each time step is three months, the stock may go up by 8% or down by 8%. For example, the stock might go up twice in a row to realize a price of $30*1.08*1.08 =...
  3. Nicole Seaman

    P1.T4.412. Binomial

    Concept: These on-line quiz questions are not specifically linked to AIMs, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier than bionicturtle.com's typical AIM-by-AIM question such that the intended difficulty level is nearer to an actual...
  4. S

    Binomial Question

    I have a question regarding the calculation of binomials: 1. The stock price is currently $80. The stock price annul up-move factor is 1.15. The risk-free is 3.9%. the value of a 2-year European call option with an exercise price of $62 using a two-step binomial model is closest to: a...
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