Question: 1. What is a binomial model and the main components of this model? What is the principal benefit of a binomial option pricing model? 2.

1. What is a binomial model and the main components of this model? What is the principal benefit of a binomial option pricing model?

2. Explain the Black-Sholes-Merton model and the main component of this model? What is the main difference between binomial and Black-Sholes-Model?

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