The Binomial Representation of Uncertainty Is Based on the Assumption

question 37

Multiple Choice

The binomial representation of uncertainty is based on the assumption that when moving from one period to the next,the value of the underlying factor (such as demand or price)

• A) has only one possible outcome.
• B) has only two possible outcomes - up or down.
• C) has many possible outcomes.
• D) cannot be accurately determined.
• E) none of the above

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