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The normal approximation of the binomial distribution is appropriate when
Payoff Profile
A plot showing the gains and losses that will occur on a contract as the result of unexpected price changes.
Forward Contract
A customized contract between two parties to buy or sell an asset at a specified price on a future date.
Option Contract
An option contract is a financial derivative that confers the right, but not the obligation, to buy or sell an asset at a set price on or before a certain date.
Forward Contract
A customizable financial contract between two parties to buy or sell an asset at a specified price on a future date.
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