Binomial Option Pricing (European or American)
If in the exam we are required to calculate the option price but not given the information whether it is European or American, what do we do? treat it as European?
or in other word, if two period binomial, in the calculation process, American is exercisable in both periods, while European is only exercisable in the second period, so the calculation should be different
Study together. Pass together.
Join the world's largest online community of CFA, CAIA and FRM candidates.