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In the Binomial Option Pricing Model The

Question 20

Multiple Choice

In the binomial option pricing model the:


A) number of intervals required for convergence is quite large.
B) interval time span decreases as time moves forward.
C) result based on infinitesimally small intervals will differ significantly from the value developed by the Black-Scholes model.
D) percentage increase in price in each interval can differ from the percentage decrease in price.
E) value of u remains constant as the number of intervals increases.

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