Binomial

Binomial probability distributions assume that at any one time there are only two possible outcomes. For example a fixed percentage size jump up or jump down in the market price of an asset.

A binomial tree or binomial lattice can then be built up from a series of binomial outcomes, to model asset prices or other variables over longer periods.

See also

• Binary system
• Binomial distribution
• Binomial option pricing model
• Binomial tree
• Boolean
• Normal frequency distribution