What Is the Recommended Way of Making Volatility a Function

question 17

Multiple Choice

What is the recommended way of making volatility a function of time in a Cox,Ross,Rubinstein tree?

• A) Make u a function of time
• B) Make p a function of time
• C) Make u and p a function of time
• D) Make the lengths of the time steps unequal

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Definitions:

Complex Civilizations

Societies with highly developed cultural, political, and economic systems, characterized by urban development, social stratification, and forms of government.

Accumulating Wealth

The process of amassing resources or assets of value over time, typically for the purpose of securing financial stability or achieving economic power.

Algonquians

A group of Native American peoples speaking Algonquian languages, widespread across North America, particularly in the northeastern region.

Settled Agriculture

The practice of cultivating the land and raising crops on a continual basis, a key development in human history that led to the growth of civilizations.