Pricing a Put with the Binomial Model Is the Same

question 30

Multiple Choice

Pricing a put with the binomial model is the same procedure as pricing with a call,except that the

• A)underlying stock must not pay dividends
• B)binomial model cannot account for expiration payoffs
• C)value of the underlying must be discounted back to the current time period
• D)expiration payoffs reflect the fact that the option is the right to sell the underlying stock
• E)none of the above

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