Binomial Pricing Trees (for Options)

Binomial trees are used in a variety of contexts in finance: Calculating probabilities for Bayesโ€™ Formula type problems Calculating the value of options on stocks, commodities, and so on (you are here) Calculating the option-adjusted spread (OAS) for bonds Calculating the value of bonds with embedded options Calculating the value of floating-rate bonds Calculating the […]

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