Financial Engineering Lecture 4: Options Pricing by Multi Period Binomial Model

This lecture covers options pricing by multi period binomial model.

1  The multi-period binomial model

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Excel spreadsheet: BinomialModel_Public.xlsx

 

2  What’s going on?

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3  Pricing American options

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4  Replicating strategies

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5  Including dividends

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6  Pricing forwards and futures

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7  The Black-Sholes model

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8  An Example: Pricing a European Put on a Futures Contract

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