Increasing the Number of Intervals in the Binomial Model Causes

question 23

Multiple Choice

Increasing the number of intervals in the binomial model causes the price shift parameters to change.New estimates are related to:

• A)the standard deviation of the underlying asset.
• B)the up state multiplier equals the standard deviation divided root n.
• C)the number of intervals in a year.
• D)All of the above.
• E)Increase in the number of intervals in a binomial model does not effect the price shift
• Parameters.

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