Binomial option pricing models for real estate development
نویسندگان
چکیده
منابع مشابه
The Binomial Option Pricing Model
The simplest model for pricing d erivative securities is the binomial model. It generalizes the o n e period \up-down" model of Chapte r 1 t o a m ulti-period setting, assuming t hat t he price of the u nderlying asset follows a random walk. In the binomial model, there are N trading periods and N+1 trading d ates, t 0 t 1 ::: t N when it is possible to i n vest in a risky security with p r i c...
متن کاملThe Discrete Binomial Model for Option Pricing
This paper introduces the notion of option pricing in the context of financial markets. The discrete time, one-period binomial model is explored and generalized to the multi-period binomial model. The multi-period model is then redeveloped using the sophisticated tools of martingale theory. The paper concludes with a brief extension of the results to continuous time, giving a heuristic derivati...
متن کاملOn the Relation Between Binomial and Trinomial Option Pricing Models
This paper shows that the binomial option pricing model, suitably parameterized, is a special case of the explicit finite difference method. To prepare for writing the sequel volume of my new book Derivatives: A PowerPlus Picture Book, I recently reviewed the work on trinomial option pricing since Boyle’s 1988 JFQA paper. I found myself attracted to the Kamrad and Ritchken (1991) trinomial mode...
متن کاملThe convergence of binomial and trinomial option pricing models
We can get the fair value of any financial derivative either analytically, by simulation or applying suitable numerical technique. For example, when we solve the American option valuation problem, the lattice models can be very useful. The procedure is based on modeling of the underlying asset price evolution (in discrete time with discrete price increments) and subsequent evaluation of the pay...
متن کاملoption pricing models
this paper is a translation of a chapter of the hook written by jonathan e. ingersoll jr. the farsi translation will he of great help to iranian students studying option pricing models.
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
ژورنال
عنوان ژورنال: Journal of Property Investment & Finance
سال: 2013
ISSN: 1463-578X
DOI: 10.1108/jpif-10-2012-0046