Vidyalelo
Commerce · Q639

Financial Management

Graduate and Post Graduate · Commerce · question 639

Q639

Third step in binomial approach of option pricing is to

A.
equalize beginning price
B.
equalize range of payoffs
Answer
C.
equalize domain of payoff
D.
equalize ending price

Answer: Option B

Solution

Answer: Option B
Solution:
Third step in binomial approach of option pricing is to equalize range of payoffs.