Q677
Movement of price or rise or fall of prices of options is classified as
A.
option lattice
B.
pricing movement
C.
price change
D.
binomial lattice
AnswerAnswer: Option D
Solution
Answer: Option D
Solution:
Movement of price or rise or fall of prices of options is classified as binomial lattice. The binomial options pricing model provides a generalizable numerical method for the valuation of options. Essentially, the model uses a "discrete-time" model of the varying price over time of the underlying financial instrument, addressing cases where the closed-form Black–Scholes formula is wanting.