Question

When the number of time periods in a binomial model is large, a European call option value does what? a. fluctuates around its intrinsic value

b. converges to a specific value
c. increases without limit
d. converges to the European lower bound
e. none of the above

Answer 1

Answer: i belive the answer is C

Explanation: the binomial model describes the number of survivors x in n independent tests. like the picture down bellow