Tag Archives: Rand Corporation

Binomial Lattice option pricing pedagogy MBA students

In teaching option pricing theory to MBAs, John Cox at Stanford developed the binomial lattice approach. http://en.wikipedia.org/wiki/Binomial_options_pricing_model http://www.derivativesstrategy.com/magazine/archive/2001/0301qa.asp DS: Around that time, you also developed the binomial model. How did this relate to the Black-Scholes model, and what made the … Continue reading

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