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What Is the Primary Potential for Error When Using the Cox-Ross-Rubenstein

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What is the primary potential for error when using the Cox-Ross-Rubenstein binomial tree?


Definitions:

Investment Revenue

Income generated from the holding of investments like stocks, bonds, real estate, and other assets.

Fair Value

An estimate of the market value of an asset or liability, based on current prices or valuations in an orderly transaction between market participants.

Equity Investment Portfolio

A collection of equity securities owned by an individual or institution, often diversified across various sectors.

Realized Gain

The profit made from the sale of an asset or investment when it is actually sold, not just on paper.

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