The binomial options pricing model is what kind of model?
AContinuous closed form
BRegression based
CMonte Carlo only
DDiscrete-time lattice
Answer & Solution
Correct answer: D. Discrete-time lattice
It models the underlying on a discrete-time lattice, or tree, of possible prices.
Keep practising Option (Finance)
Browse all Option (Finance) questions for CA Final, or explore more Strategicfinancialmanagement topics.
Related questions
When is charm especially useful for a delta-hedger?Which Greek is most important for an at-the-money straddle?Speed measures the change in gamma with respect to what?Which Greek is also known as vega convexity?Which Greek is called delta decay?Gamma is classed as which kind of Greek?Which Greek measures sensitivity to the interest rate?Which Greek measures the time decay of an option?