Question: Question 1 1 pts In the binomial model changes in stock price from period to period are based on a single coin flip. This is

 Question 1 1 pts In the binomial model changes in stock

Question 1 1 pts In the binomial model changes in stock price from period to period are based on a single coin flip. This is obviously not how stock prices change in the real world. Which of the following best justifies that use of this assumption might still allow us to produce useful results? O Central limit theorem Law of large numbers Command economy Ease of computation Stochastic integration

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!