New answers tagged binomial-tree
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What are the relation between the risk neutral measures in binomial tree and in Black Scholes model?
There is a deeper relationship between the two risk-neutral measures. Take any event in the binomial model with a finite number of steps
and calculate the risk-neutral probability of it.
Take the same event in the Black Scholes model and calculate the risk-neutral probability of it. For most events, the two probabilities are different. Now let the number of ...
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