Zhao Chun-ru
Abstract
Based on the systematic anaysis of the relations and differences between Binomial Trees model and Black-Scholes model which are frequently used in option price,this article finds out that Black-Scholes model is the limit of Binomial Trees model,and optimizes the two models.
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Based on the systematic anaysis of the relations and differences between Binomial Trees model and Black-Scholes model which are frequently used in option price,this article finds out that Black-Scholes model is the limit of Binomial Trees model,and optimizes the two models.
Key concepts: Binomial options pricing model, Binomial (polynomial), Trinomial tree, Black–Scholes model, Limit (mathematics), Binomial distribution, Valuation of options, Econometrics