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The Binomial No-Arbitrage Pricing Model

  • Steven E. Shreve
Part of the Springer Finance book series (FINANCE)

Abstract

The binomial asset-pricing model provides a powerful tool to understand arbitrage pricing theory and probability. In this chapter, we introduce this tool for the first purpose, and we take up the second in Chapter 2. In this section, we consider the simplest binomial model, the one with only one period. This is generalized to the more realistic multiperiod binomial model in the next section.

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Copyright information

© Springer Science+Business Media New York 2005

Authors and Affiliations

  • Steven E. Shreve
    • 1
  1. 1.Department of Mathematical SciencesCarnegie Mellon UniversityPittsburghUSA

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