All of the following are practical applications of the binomial model except
A)choices regarding real options
B)options regarding executive incentive plans
C)models in which the stock price can go up,down,or remain constant in the next period
D)embedded options within debt securities
E)none of the above

Question

Quizplus · Accepted Answer

The binomial model is used for options pricing and assumes that the price of the underlying asset can only move to two possible values over any short time period (up or down), not remain constant.

All of the Following Are Practical Applications of the Binomial