Multiple Choice
Which of the following statements about the binomial option pricing model is not always true?
A) it can capture the effect of early exercise
B) it can accommodate a large number of possible stock prices at expiration
C) it reflects the effects of the stock price,exercise price,risk-free rate,volatility and time to expiration
D) it gives the price at which the option will trade in the market.
E) none of the above
Correct Answer:
Verified
Correct Answer:
Verified
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