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    Derivatives and Risk Management Study Set 2
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    Exam 4: Option Pricing Models: the Binomial Model
  5. Question
    One Way to Model an Option with Dividends in the Binomial
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One Way to Model an Option with Dividends in the Binomial

Question 4

Question 4

True/False

One way to model an option with dividends in the binomial framework is for the stock price minus the present value of the dividends to grow by the up and down factors.

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