Binomial option pricing model

Definition:

An option pricing model in which the underlying asset can assume one of only two possible, discrete values in the next time period for each value that it can take on in the preceding time period.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

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Agency theory

The analysis of principal-agent relationships, in which one person, an agent, acts on behalf of another person, a principal.

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