Chapter 14. Binomial Trees Practice Question set contains 22 pages covering the following learning objectives:
* Calculate the value of an American and a European call or put option using a one-step and two-step binomial model.
* Describe how volatility is captured in the binomial model.
* Describe how the value calculated using a binomial model converges as time periods are added.
* Define and calculate delta of a stock option.
* Explain how the binomial model can be altered to price options on stocks with dividends, stock indices, currencies, and futures.
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