Binomial: Difference between revisions
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Revision as of 14:10, 23 October 2012
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