Differences between a recombining and non recombining tree

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If the binomial model produces a call option price that is higher than the price at which the option is trading in the market, what strategy is suggested?

Discuss how a binomial model accommodates the possibility of early exercise of an option.

Explain the differences between a recombining and non-recombining tree. Why is the former more desirable?

Reference no: EM131326111

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