Binomial trees are used in a variety of contexts in finance: Calculating probabilities for Bayes’ Formula type problems Calculating the value of options on stocks, commodities, and so on (you are here) Calculating the option-adjusted spread (OAS) for bonds Calculating the value of bonds with embedded options Calculating the value of floating-rate bonds Calculating the […]
This article is for members only. You can become a member now by purchasing a
CFA® Level I Membership, CFA® Level II Derivatives Membership, CFA® Level II Membership
This will give you access to this and all other articles at that membership level.