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9
votes
1answer
352 views

Fixed income modeling

I am currently working on my research paper and trying to explain a two-dimensional variable: volume and instrument of corporate debt financing. Independent variables that I believe must be included ...
3
votes
2answers
624 views

Risk neutral probability in binomial lattice option coming greater than 1…what's wrong?

I am substituting reasonable values in the below fomula (like r=0.12, T=20, nColumn=16, sigma=0.004)...why is probability coming out to be greater than 1? Any help? Thanks! ...