Which of the Following Statements About the Multiperiod Binomial Option

Multiple Choice

Which of the following statements about the multiperiod binomial option pricing model is INCORRECT?

A) The pricing technique is described as forward induction.
B) The pricing technique is described as backward induction.
C) When the model's parameters are properly set and the model is run over many small intervals,then it gives an answer that approaches the Black-Scholes-Merton model value.
D) The binomial model can be used to price exotic options.
E) Strictly speaking,the binomial model is not a separate model but an approximation method.