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The goal is to build a $n$ step binomial tree knowing the end nodal probabibilities $p_1, \dots, p_m$, which correspond to the time $T$ states $S_1, \dots, S_m$. We assume that all paths ending in the same nodes have the same probabibilities and that todays state $S_0$ is known.

Is there some efficient algo out there, which encorporates dividends?

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  • $\begingroup$ Do you mean like computational in terms of data-structures? $\endgroup$ – SmallChess Nov 18 '15 at 9:37
  • $\begingroup$ Something like that I just want to construct the tree. $\endgroup$ – Phun Nov 18 '15 at 9:40
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    $\begingroup$ If this is the case, the question is more related to programmers.overflow, because this is really a question for computer scientist. $\endgroup$ – SmallChess Nov 18 '15 at 9:48
  • $\begingroup$ Not in my view. A binomial tree is clearly a quantitative tool and its fast construction is a relevant problem for quant finance. $\endgroup$ – Phun Nov 18 '15 at 9:51
  • $\begingroup$ You know what a binomial tree is and about its applications in finance? $\endgroup$ – Phun Nov 18 '15 at 9:57

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