JENNIFER E

READING 3: "An Introduction to Arbitrage-Free Pricing of Derivatives," Ch. 5, Fixed Income Securities, University Edition, Bruce Tuckman (John Wiley & Sons, 1995), pp. 67-72. This reading provides an example of the arbitrage-free pricing of an interest rate option. Given a binomial model of the future and random movement of interest rates, one ... ................
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