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The Binomial Tree

Pricing an option with one step, then with many steps, the risk neutral probability, and early exercise for American options.

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How this module runs

  1. 01 · IntroductionWhat it is and why it matters
  2. 02 · Key PointsThe most important points
  3. 03 · The Math + PythonFormula, step by step, code
  4. 04 · Real WorldWhere it is used, best practice, common mistakes
  5. 05 · QuestionsExercises and interview
  6. Mini projectOne small program
Mini projectEuropean and American puts on trees of growing sizeOne small program on the topic, to run and to extend step by step.

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