Day: August 26, 2020

Binomial trees for stock prices (or prices for pretty much any asset: stocks, commodities, real estate, baseball cards, whatever) are pretty simple (i.e., too simple to be realistic): they assume that: Time (into the future) can reasonably be divided into periods of equal length For each (future) time period, there are only two (hence: binomial)…

If you thought that you learned all you needed to know about counting in elementary school, think again.  I’ll run through several counting formulae (with examples) used in the CFA curriculum, but rest assured that this barely touches on the subject of counting; indeed, it is a main branch of mathematics (combinatorics) with active research…