Lian Ying-ying
Abstract
The binomial tree is one of the numerical methods in common use for option pricing. Using the idea of moment in probability theory,this article will get a new binomial parameter model by exact calculation. The new parameter will get rid of the original defect and has higher calculating accuracy.
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The binomial tree is one of the numerical methods in common use for option pricing. Using the idea of moment in probability theory,this article will get a new binomial parameter model by exact calculation. The new parameter will get rid of the original defect and has higher calculating accuracy.
Key concepts: Binomial (polynomial), Binomial options pricing model, Binomial distribution, Negative binomial distribution, Moment (physics), Mathematics, Applied mathematics, Binomial theorem