When the number of time periods in a binomial model is large, what happens to the binomial probability of an up move?
a. it approaches 1.0
b. it approaches zero
c. it fluctuates without pattern
d. it converges to 0.5
e. none of the above
Answer: A
When the number of time periods in a binomial model is large, what happens to the binomial probability of an up move?
a. it approaches 1.0
b. it approaches zero
c. it fluctuates without pattern
d. it converges to 0.5
e. none of the above
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