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 Glossary   >   T   >   "Two-state option pricing model" Definition   

        Two-state option pricing model

An option pricing model in which the underlying asset can take on only two possible (discrete) values in the next time period for each value it can take on in the preceding time period. Also called the binomial option pricing model.

Two-state option pricing model


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Two-state option pricing model - An option pricing model in which the underlying asset can take on only two possible (discrete) values in the next time period for each value it can take on in the preceding time period. Also called the binomial option pricing model.


Two-state option pricing model : an option pricing model in which the underlying asset can take on only two possible (discrete) values in the next time period for each value it can take on in the preceding time period. also called the binomial option pricing model.