Multiperiod Binomial Pricing

In course

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Description

This lecture covers the concept of multiperiod binomial pricing models, starting from a 2-period model and extending to N-period models. It explains the evolution of prices, simulated paths, concatenation of period problems, and the replicating portfolio at different nodes. The lecture also introduces a recursive algorithm for pricing and discusses the law of one price.

Instructors (2)

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Official source

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