Question: In the binomial option pricing model, the factor u by which the underlying price goes UP, is a function of what variable? underlying asset's volatility

In the binomial option pricing model, the factor "u" by which the underlying price goes UP, is a function of what variable?

underlying asset's volatility

underlying asset's price

time to option expiration

None of the above

Which of the following models does NOT use the concept of risk-neutral probability?

a.

Binomial option pricing model

b.

Discounted Cash Flow model

c.

CDS valuation model

d.

Merton's credit risk model

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