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Which of the Following Statements Regarding the Binomial Model Is

Question 85

Multiple Choice

Which of the following statements regarding the Binomial Model is false?


A) It requires that we make assumptions about the probabilities of up and down movements in the underlying stock's price.
B) More complex versions of the binomial model can accommodate a wide range of final stock values.
C) It prices options through the principle of 'no arbitrage.'
D) It argues that the value of identical assets should be selling at identical prices.

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