The Equation of Real Option Value under Trinomial Tree Model - Open Journal of Social Sciences

JSS > Vol.5 No.3, March 2017

Open Journal of Social Sciences

Volume 5, Issue 3 (March 2017)

ISSN Print: 2327-5952 ISSN Online: 2327-5960

Google-based Impact Factor: 0.73 Citations

The Equation of Real Option Value under Trinomial Tree Model ()

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DOI: 10.4236/jss.2017.53001 2,356 Downloads 4,385 Views

Author(s)

Changsheng Dou^*, Li Wang, Chenxi Zhu

Affiliation(s)

School of Statistics, Capital University of Economics and Business, Beijing, China.

ABSTRACT

Trinomial tree model is excelled than binomial tree model in precision and calculation from an example. Triple Tree pricing error is much smaller, the result is simpler. By careful analysis, we conclude the real option value under trinomial tree model.

KEYWORDS

Trinomial Tree Model, Binomial Tree Model, Equation of Real Option Value

Share and Cite:

Dou, C. , Wang, L. and Zhu, C. (2017) The Equation of Real Option Value under Trinomial Tree Model. Open Journal of Social Sciences, 5, 1-4. doi: 10.4236/jss.2017.53001.

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