The binomial price will theoretically equal the Black-Scholes-Merton price under which of the following conditions?

The binomial price will theoretically equal the Black-Scholes-Merton price under which of the following conditions?




a. when the number of time periods is large
b. when the option is at-the-money
c. when the option is in-the-money
d. when the option is out-of-the-money
e. none of the above





Answer: A


Learn More :