4.3e Derivative instruments - the mathematics of Black Scholes - tree solutions

This paper covers:

·        Binomial and trinomial trees

·        Option pricing with recombining binomial trees

·        Calculating the tree parameters

·        A closer look at the trees

·        A note on discrete dividends

·        A discrete discounted binomial model

·        Practical hedging in a discrete setting

·        Option pricing with recombining trinomial trees

All the models are applied to an example European put option

This paper has 16 pages and the Excel has 6 sheets